Not upheld: irresponsible lending complaint against Barclays Bank UK PLC

Decision detail

Summary

Miss F complained that Barclays irresponsibly lent to her when she applied for a consolidation loan in December 2021. Barclays carried out CRA checks, affordability assessment, and income verification, which revealed stable finances and existing commitments up to date. Although the assessment showed low disposable income after loan repayments, the ombudsman found this was reasonable given the debt consolidation purpose would eliminate existing debt payments. The ombudsman upheld Barclays' position that proportionate checks had been conducted and no evidence suggested the loan was unaffordable at the time of lending, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman found that Barclays carried out proportionate checks appropriate for the early stage of a lending relationship. The checks revealed a stable financial picture with no adverse information. Although disposable income was low, the debt consolidation purpose meant existing debt repayments would be eliminated, reasonably improving Miss F's overall financial position. There was no regulatory requirement for more extensive checks such as bank statement review, and Barclays was entitled to rely on the checks it performed. The ombudsman concluded Barclays could not have known or ought to have known the loan payments were unaffordable at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website