Not upheld: irresponsible lending complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Miss S complained that Halifax lent to her irresponsibly by opening two credit card accounts and increasing a credit limit without conducting adequate affordability checks. Halifax defended its position, stating proportionate checks had been undertaken. The investigator found Halifax acted responsibly when opening the first account but likely should not have increased the credit limit or opened the second account. However, the ombudsman did not uphold the complaint because Miss S never used the increased credit limit or the second account, and therefore suffered no financial loss. The ombudsman declined to make a punitive award where no loss had been incurred.

The Ombudsman's reasoning

The ombudsman accepted that Halifax acted responsibly when opening account 7936, as proportionate checks were conducted and the credit appeared affordable. Regarding the later lending decisions (credit limit increase and opening account 9694), while the investigator found Halifax likely should not have approved this credit, the ombudsman declined to address these decisions because Miss S suffered no financial loss, having never utilised the extended credit. The ombudsman noted that FOS awards are not punitive and complaints are generally only upheld where a complainant has suffered a loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website