Partially upheld: irresponsible lending and unaffordable credit provision complaint against NewDay Limited
Financial Ombudsman decision DRN-6355877 of 2026-05-14T00:00:00+00:00. irresponsible lending and unaffordable credit provision complaint against NewDay Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6355877 |
|---|---|
| Decision date | 2026-05-14T00:00:00+00:00 |
| Firm | NewDay Limited |
| Product | credit card |
| Claim type | irresponsible lending and unaffordable credit provision |
| Outcome | Partially upheld |
| Remedy | NewDay must rework the Opus card account and refund all interest, fees and charges applied from 26 October 2021 onwards. Any refunds should be applied to outstanding balance. If surplus remains, NewDay must pay simple interest at 8% per annum from date of each overpayment to settlement. If balance remains due, NewDay must work with Mr H to agree an affordable repayment plan. Once account is cleared, NewDay must remove all adverse credit information reported by them from Mr H's credit file. |
Summary
Mr H complained that NewDay irresponsibly provided credit through an Opus card (issued July 2020, with five limit increases through February 2023) and a Marbles card (issued December 2022), claiming inadequate affordability checks and unaffordable credit. The ombudsman found NewDay's checks were reasonable for the initial Opus card and increases in February and June 2021, but by October 2021, unsecured debt had increased over 200% in eight months without income verification, making further lending foreseeable harmful. The Marbles card was appropriately issued based on proportionate checks and Mr H's payment history. The ombudsman partially upheld the complaint, requiring NewDay to refund all interest, fees and charges on the Opus card from 26 October 2021 onwards and remove adverse credit information once the account is cleared.
The Ombudsman's reasoning
NewDay was required to carry out reasonable and proportionate affordability checks before each credit decision. For the initial Opus card and increases in February and June 2021, the checks were adequate given the modest credit amounts and apparent disposable income. However, by October 2021, NewDay had sufficient information showing unsecured debt had more than doubled in eight months without verifying whether Mr H's income had changed. The ombudsman concluded NewDay should have known further lending was likely to cause foreseeable harm. The subsequent increases in October 2022 and February 2023 should not have been provided. For the Marbles card, despite the overall debt position, the checks were proportionate and Mr H's payment history on the Opus card over 30 months suggested responsible management. The ombudsman rejected arguments about gambling and financial coercion as these were not disclosed to NewDay at the time of the relevant applications, and regulatory rules do not require lenders to review bank statements in every case.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| NewDay Limited, all decisions | 1 | 50% |
Source
Read the original decision on the Financial Ombudsman Service website