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

Decision detail

Summary

Mr H complained that NewDay irresponsibly provided him with a credit card and increased his limit six times between July 2019 and February 2023, ultimately reaching £5,250. Mr H argued that NewDay should have conducted more detailed affordability checks given his high credit utilisation and regular cash withdrawals. The ombudsman found that NewDay carried out proportionate checks using permitted methods (CRA data and statistical estimates) at each stage, and that the estimated disposable income supported sustainable repayments. Despite Mr H's high utilisation, his regular overpayments and clean payment history meant NewDay had no reasonable grounds to suspect affordability problems. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NewDay carried out proportionate affordability checks at each stage using methods permitted by regulations (CRA data for income and expenditure, statistical data for living costs). The estimated disposable income at each decision point was sufficient to support sustainable repayments. Although Mr H had high credit utilisation and made regular cash withdrawals, these were balanced by his consistent overpayments and lack of adverse credit file information. The ombudsman concluded that NewDay did not have sufficient information to know Mr H was experiencing financial difficulty, and that the cumulative lending pattern alone did not require more detailed checks given his apparent ability to manage the account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website