Not upheld: irresponsible lending complaint against Zopa Bank Limited

Decision detail

Summary

Miss P complained that Zopa lent to her irresponsibly when she borrowed £4,000 in May 2022. Although Miss P initially made 11 successful repayments, her loan was later added to a debt management plan in May 2023. The ombudsman examined whether Zopa's pre-lending affordability checks were adequate and whether the results justified the lending decision. The ombudsman concluded that Zopa's checks were proportionate, properly verified Miss P's income, appropriately estimated her expenditure, and correctly accounted for her existing credit commitments. The results showed Miss P would have sufficient disposable income to sustain the repayments. Accordingly, the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement that lenders must conduct reasonable and proportionate affordability assessments that are borrower-focused. The ombudsman found Zopa's checks were proportionate given the loan amount, Miss P's income level, and the 60-month term. The checks revealed sufficient disposable income after accounting for all existing commitments. The fact that Miss P had successfully repaid previous loans without missed payments provided confidence in her ability to manage credit. The ombudsman concluded that further enquiries such as bank statements were not necessary given the proportionate checks already performed and their positive results.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website