Not upheld: Irresponsible lending complaint against Metro Bank PLC (trading as Ratesetter)

Decision detail

Summary

Mrs C complained that Ratesetter irresponsibly lent her £8,000 in April 2023 given her personal and financial circumstances. Mrs C later stated she had recently lost her job and was experiencing a difficult pregnancy at the time of application. Ratesetter had obtained Mrs C's income declaration and cross-checked it against credit reference agency data showing funds entering her bank account, conducted credit searches showing no adverse information, and assessed her existing debt as manageable. The ombudsman found that Ratesetter's checks were proportionate and that based on validated income and statistical expense estimates, Mrs C appeared able to afford the repayments. The complaint was not upheld as Ratesetter could not reasonably have been aware of Mrs C's actual circumstances at the time of application.

The Ombudsman's reasoning

The ombudsman found that Ratesetter did not simply accept Mrs C's declarations but cross-checked them against credit reference agency data, which validated her income declaration. The credit searches showed no adverse information and her existing debt was manageable relative to validated income. When her validated income was combined with statistical living expense estimates and existing credit commitments, she had sufficient funds remaining to afford the loan repayments. Although Mrs C's circumstances deteriorated after the loan was provided, she had declared employment at application which was validated, so Ratesetter could not reasonably have been aware of her actual difficulties at that time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website