Not upheld: irresponsible lending - failure to carry out appropriate affordability checks and failure to recognise ongoing reliance on overdraft complaint against NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY (NatWest)

Decision detail

Summary

Mr A complained that NatWest irresponsibly granted him a £500 overdraft in late 2023 and failed to recognise his ongoing reliance on it. He argued NatWest should have identified his financial difficulty from his recent credit card application. NatWest maintained they conducted appropriate affordability checks showing disposable income of £1,050 monthly and found no adverse credit information. The ombudsman found the initial checks proportionate and the ongoing monitoring through annual review and correspondence adequate, concluding the overdraft was affordable and NatWest acted responsibly. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NatWest's proportionate checks at the time of lending were appropriate given the £500 overdraft limit, Mr A's recorded disposable income of £1,050 per month, and his strong credit history with no adverse information. For ongoing monitoring, the ombudsman concluded that after just one year, the fact Mr A remained in overdraft did not alone indicate financial difficulty, particularly as the account was not his main account and he had sufficient income available through other accounts to reduce the overdraft if he wished. The regular correspondence from NatWest provided appropriate support and awareness.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website