Upheld: irresponsible lending and unaffordable credit complaint against Santander UK plc
Financial Ombudsman decision DRN-6340489 of 2026-05-06T00:00:00+00:00. irresponsible lending and unaffordable credit complaint against Santander UK plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6340489 |
|---|---|
| Decision date | 2026-05-06T00:00:00+00:00 |
| Firm | Santander UK plc |
| Product | loan |
| Claim type | irresponsible lending and unaffordable credit |
| Outcome | Upheld |
| Remedy | Santander must calculate total repayments made by Mr R and deduct from the total amount received. If Mr R overpaid, refund the overpayment plus 8% simple interest from the date of overpayment. If capital remains outstanding, agree an affordable repayment plan with Mr R. Remove any adverse credit information once Mr R complies with the repayment plan. As the account has been sold, Santander must attempt to buy it back or work with the new owner to achieve the same outcome. |
Summary
Mr R complained that Santander irresponsibly provided him with a £20,000 loan that was unaffordable. Although Santander conducted affordability checks using declared income and CRA data, the ombudsman found these checks were not reasonable and proportionate given the loan's amount and term. Bank statements for the four months prior to the loan showed Mr R had average essential expenditure of £2,960 monthly, which when combined with the £563.91 loan payment would have exceeded his available disposable income. The ombudsman upheld the complaint and ordered Santander to refund any overpayments with interest and work with Mr R on an affordable repayment plan for any remaining balance.
The Ombudsman's reasoning
Although Santander's checks showed no signs of financial difficulty and Mr R appeared to be managing existing credit well, the amount and term of the loan (£20,000 over 48 months) required more detailed affordability checks. Bank statements would have revealed that Mr R's actual essential expenditure was approximately £2,960 per month, leaving insufficient disposable income after these commitments to cover the £563.91 monthly loan payment. Therefore, Santander did not make a fair lending decision.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK plc, all decisions | 14,445 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website