Not upheld: irresponsible lending complaint against Zopa Bank Limited

Decision detail

Summary

Miss W complained that Zopa lent to her irresponsibly when she was already in financial difficulty and became increasingly reliant on credit. She had two loans: £7,000 in December 2021 and £12,000 in January 2023, and later required breathing space with the second loan defaulting. Zopa conducted CRA checks, income verification, and disposable income calculations for both loans, finding no signs of financial difficulty or missed payments at the time of lending. The ombudsman found that Zopa's checks were reasonable and proportionate, the lending decisions were fair based on available information, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for proportionate checks based on the type, amount, duration and total cost of credit, and the borrower's individual circumstances. For the first loan, the available information showed no signs of financial difficulty, no missed payments, and sufficient disposable income. For the second loan, despite Miss W's concerns about increased credit levels, the ombudsman found that the first loan was not stated to be for consolidation purposes, so the growth in credit between loans would not have raised concerns. The debt-to-income ratio had improved, there were no new defaults, and disposable income remained substantial. The ombudsman concluded that Zopa's checks were reasonable and proportionate in both cases and that the lending decisions were fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website