Not upheld: irresponsible lending complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr S complained that NatWest irresponsibly provided him with a £25,000 personal loan in 2021. Mr S claimed he was vulnerable at the time due to family financial circumstances and mental health issues. The ombudsman examined whether proportionate affordability checks would have revealed the loan was unaffordable, considering Mr S's bank statements showing income of approximately £3,700 and fixed commitments of around £1,800. The ombudsman found that such checks would have shown Mr S could afford the monthly payment of £355.74 and that NatWest was not aware of Mr S's vulnerability as it was not disclosed and the application was made online. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that proportionate affordability checks based on Mr S's bank statements would have shown he could afford the new monthly loan payment. With income of £3,700 and fixed commitments of £1,800, Mr S had sufficient remaining funds to cover the £355.74 monthly payment alongside essential living expenses. The fact that Mr S had taken out other loans and increased credit card limits did not, in itself, prevent fair lending if an income and expenditure assessment showed affordability. Mr S's vulnerability was not communicated to NatWest and would not have been apparent from an online application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website