Not upheld: irresponsible lending and unfair credit relationship complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Miss D, a single parent employed part-time, obtained a Tesco credit card in November 2014 with a £1,100 limit, which was increased four times over six years to £6,370. She complained in July 2025 that Tesco lent irresponsibly, noting she was on a low income and her debts grew to over £13,000 by 2019. The ombudsman found that Tesco's affordability checks at account opening and for each increase were reasonable and proportionate, based on declared income, credit file information, and account performance showing regular payments and near-zero balances. The ombudsman rejected the argument that Tesco should have reviewed bank statements, finding it had no obligation to do so. The complaint was not upheld as the ombudsman found no evidence of irresponsible lending or an unfair credit relationship.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the Consumer Credit Act 1974 to assess whether the credit relationship was unfair. The key test was whether Tesco carried out reasonable and proportionate affordability checks and whether its lending decisions were fair. The ombudsman found that Tesco's checks at account opening and for each credit limit increase were reasonable and proportionate given the circumstances. At each stage, Tesco had evidence of sustainable income, manageable existing debt, and good account performance with no signs of financial difficulty. The ombudsman rejected the argument that Tesco should have reviewed Miss D's bank statements, noting it had no obligation to do so and was entitled to rely on the information provided and obtained through credit reference agencies. The ombudsman also found that Tesco acted appropriately when Miss D began to struggle, providing a persistent debt warning and ultimately setting up a repayment plan with interest frozen.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website