Not upheld: Irresponsible lending complaint against North Edinburgh and Castle Credit Union Limited trading as Castle Community Bank (CCB)

Decision detail

Summary

Mr H complained that CCB irresponsibly lent him £15,000 in July 2025 when the loan was unaffordable. Mr H argued that reviewing his bank statements would have revealed he had no money left each month, maintained overdrafts on two accounts, and continuously took out loans to pay expenses. CCB conducted automated checks including credit file review and income verification, calculating Mr H would have approximately £1,358 in monthly disposable income after all repayments. The ombudsman found CCB's checks were reasonable and sufficient, revealed no signs of financial difficulty, and the loan appeared affordable based on the information obtained. The ombudsman did not uphold the complaint, finding CCB acted fairly in deciding to lend.

The Ombudsman's reasoning

The ombudsman found that CCB's automated checks including credit file review and income verification were reasonable and sufficient. The checks revealed no signs of financial difficulty or persistent debt reliance. CCB's use of statistical data to estimate essential expenditure was standard practice and reasonable given the information obtained. The calculated disposable income of £1,358 per month suggested the loan was affordable. The debt consolidation purpose provided additional confidence that Mr H's financial position would improve. Bank account statements were not required as part of reasonable checks in these circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website