Not upheld: irresponsible lending - affordability of credit limit increase complaint against Santander UK Plc

Decision detail

Summary

Mrs O complained that Santander irresponsibly lent to her by increasing her credit card limit by £1,400 to £6,700 in July 2022 without properly assessing affordability. She argued that proper checks would have revealed she was already reliant on credit and struggling with financial commitments. Santander defended its decision, stating it had validated her income and conducted appropriate creditworthiness assessments showing sufficient disposable income. The ombudsman found that Santander's checks were reasonable and proportionate, Mrs O had sufficient disposable income to sustain the additional repayment of approximately £46 monthly, and her credit file showed no adverse information and good repayment history, therefore the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Santander took reasonable steps to understand Mrs O's income and expenditure in accordance with CONC requirements. The firm's assessment showed Mrs O had sufficient disposable income to sustain the additional £46 monthly repayment, and her good repayment history was a reliable indicator she could manage debt responsibly. The checks were proportionate for the type and amount of credit provided, and there was nothing in the information available that should have prompted further investigation such as requesting bank statements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website