Not upheld: irresponsible lending complaint against NewDay Ltd trading as Aqua and Fluid

Decision detail

Summary

Miss M complained that NewDay lent irresponsibly when providing her with two credit cards in 2017 and 2018, with multiple limit increases over time. NewDay verified Miss M's income at £27,000 annually and calculated she had sufficient disposable income to afford the cards. Although Miss M's circumstances were complicated with mixed income sources, variable expenditure, and some instances of late payments, the ombudsman found the lending was sustainably affordable until July 2022. NewDay acknowledged it should not have increased the Aqua card limit in July 2022 when debt had increased significantly and has already provided compensation. The ombudsman did not uphold the complaint, finding NewDay's checks were proportionate and the lending was not irresponsible.

The Ombudsman's reasoning

The ombudsman found NewDay's initial checks were proportionate and showed Miss M could afford the credit. Income was verified and disposable income calculations indicated affordability. Although Miss M's circumstances were complicated with mixed income sources and variable expenditure, the available information indicated cards were sustainably affordable and she paid them without significant issues. The ombudsman accepted that even with more detailed checks, there would not have been enough evidence to refuse lending until July 2022, when significantly increased debt indicated a material change in circumstances that NewDay should have acted upon.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website