Not upheld: irresponsible lending - credit limit increases complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr D complained that Tesco Bank irresponsibly increased his credit card limit multiple times between 2021 and 2025 without conducting sufficient affordability checks. Tesco Bank obtained Mr D's income (£3,700-£4,200 monthly), housing costs, and credit commitments from Credit Reference Agencies, and estimated living costs at 30% of income, concluding he had disposable income of £1,170-£1,540 monthly to afford repayments of approximately £100 per month per £2,000 limit increase. The ombudsman found these checks were proportionate and the lending decisions fair, and even when reviewing Mr D's actual bank statements, concluded the increases would have been affordable. The complaint was not upheld, though the ombudsman acknowledged Tesco Bank's delayed correction of credit limit reporting and a call handler's insensitive phrasing.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank's checks were proportionate to the circumstances, using CRA data for income and housing costs and statistical data (30% of income) for living costs estimates, which are specifically permitted by FCA regulations. The ombudsman was satisfied that Mr D's disposable income of approximately £1,170-£1,540 monthly was sufficient to afford sustainable repayments on the increased limits (approximately £100 per month for a £2,000 increase). Even when reviewing Mr D's actual bank statements, the ombudsman concluded the limit increases would have been found affordable. The ombudsman noted that while further checks could arguably have been done, they would not have changed the outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website