Not upheld: irresponsible lending and unfair relationship complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr B complained that NatWest lent to him irresponsibly across multiple loans from 2014 to 2024, with particular concern about Loans 4, 5, and 6 approved in close succession (August 2020, May 2021, May 2022) and used to consolidate existing NatWest debt. The ombudsman found that while some checks were not fully proportionate given the repeated refinancing pattern, additional checks would have revealed Mr B had shared household costs, regular income, perfect repayment history, and was consolidating higher-interest debt into lower-cost loans. The ombudsman concluded the lending was not irresponsible and did not uphold the complaint, though it reminded NatWest to treat Mr B with fairness and forbearance going forward.

The Ombudsman's reasoning

The ombudsman applied the FCA's proportionate approach to lending checks, considering the size, cost, and risks of credit. While acknowledging that some checks were not fully proportionate given the repeated refinancing pattern, the ombudsman concluded that additional checks would have revealed the same information available to the investigator: Mr B had shared household costs, regular (though fluctuating) income, good credit history, perfect repayment record, and was consolidating debt at higher interest rates into lower-cost loans. The ombudsman found nothing to suggest Mr B was unlikely to sustainably repay the loans based on information provided at the time. Vulnerabilities were not known to NatWest at the time of lending and would not have changed the outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website