Not upheld: irresponsible lending - inadequate affordability checks complaint against National Westminster Bank plc

Decision detail

Summary

Miss R complained that Natwest lent to her irresponsibly when issuing a credit card with a £3,750 limit in August 2019 and subsequently increasing it to £3,000 in February 2020, arguing that the firm's affordability checks were insufficient. Natwest rejected the complaint, and an FOS investigator agreed with the firm. The ombudsman found that Natwest carried out reasonable and proportionate affordability assessments based on credit checks showing no adverse markers, estimated disposable income of £600, and improved debt management over time. The ombudsman noted Miss R's vulnerability due to domestic abuse but concluded that Natwest had not lent irresponsibly and had appropriately apologized for service shortcomings. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for reasonable and proportionate affordability checks that are borrower-focused. For the initial credit card issuance, the credit check and affordability assessment showed no adverse indicators and estimated £600 disposable income, supporting the lending decision. For the credit limit increase, the credit check showed improved debt management with unsecured debt halved to £4,000, and the £200 increase was minimal relative to the original £3,750 limit. The ombudsman concluded that nothing in the evidence suggested Miss R could not make sustainable repayments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website