Not upheld: Irresponsible lending complaint against NewDay Ltd trading as Marbles

Decision detail

Summary

Mr W complained that Marbles irresponsibly granted him a credit card and increased its limit eight times between March 2016 and December 2021, from £300 to £8,000, when the credit was unaffordable. Mr W was a contractor with fluctuating income and periods without work, and his existing credit commitments grew from £14,350 to £63,000 over the period. The ombudsman found that while Marbles should have conducted further checks before increases from November 2017 onwards, the firm's checks for the initial card and first three increases were proportionate. Critically, the ombudsman could not conclude that Marbles would not have granted the later increases if it had conducted further checks, as Mr W failed to provide complete financial information. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring proportionate checks before lending and credit limit increases to ensure sustainable repayment without further borrowing. For the initial card and first three increases, the checks were proportionate given the credit limits and available information. For later increases (November 2017 onwards), the ombudsman found Marbles should have conducted further checks given the increasing credit commitments and income fluctuations. However, the ombudsman could not conclude that Marbles would not have granted the increases if it had done so, as Mr W failed to provide complete financial information (tax returns, full bank statements) that would have given a complete picture of his income and expenditure. The burden of proof required the ombudsman to have sufficient evidence to reasonably conclude irresponsible lending occurred.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website