Not upheld: irresponsible lending complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Miss G complained that Halifax irresponsibly provided four personal loans between April 2021 and September 2024, totalling approximately £74,625. While the ombudsman found Halifax's initial affordability assessments were not reasonable and proportionate, detailed analysis of Miss G's account statements showed she had sufficient income to cover all regular expenses, existing credit commitments, deferred payment obligations, and the new loan repayments with reasonable disposable income remaining. Miss G maintained her repayments on all previous loans, and there was no evidence of financial difficulty. The ombudsman did not uphold the complaint, finding all four loans were provided fairly.

The Ombudsman's reasoning

While Halifax's initial checks were not reasonable and proportionate, the ombudsman used account statement analysis to assess what proportionate checks would have identified. For each loan, the analysis showed Miss G had sufficient income to cover regular expenses (housing, utilities, council tax, insurances, communications), existing credit commitments, deferred payment obligations, and the new Halifax loan repayments, leaving a reasonable amount of disposable income for general living costs. Miss G maintained her repayments on previous loans, and there was nothing to suggest she would be unable to sustainably repay. Even for Loan 4, despite the pattern of four loans in 3.5 years raising concerns about debt reliance, the financial position supported lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website