Not upheld: irresponsible lending / failure to provide support during financial difficulties complaint against Santander UK Plc

Decision detail

Summary

Mr T complained that Santander failed to support him when he fell into financial difficulties from 2019 onwards, specifically requesting charge suspension in December 2023 after the birth of his first child and taking a lower-paying job due to illness. Santander disputed receiving Mr T's December 2023 letter and argued it had acted fairly throughout. The ombudsman reviewed account statements from 2019 onwards and found that Mr T had sufficient disposable income to cover essential expenditure and could have repaid the overdraft over a reasonable period. No clear signs of financial difficulty were evident until Mr T stopped making payments after switching accounts in December 2023, at which point Santander reasonably suspended the account and ceased applying interest and charges. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied CONC 5D.2 regulations requiring lenders to monitor repeat overdraft use and identify customers in financial difficulty. Reviewing account statements from 2019 onwards, the ombudsman found that Mr T had sufficient disposable income to cover essential expenditure and could have repaid the overdraft over a reasonable period if he had chosen to do so. The account showed regular wage deposits clearing the overdraft with periods of credit, minimal essential payments, and discretionary spending including cryptocurrency investments. No clear signs of financial difficulty were evident until Mr T stopped making payments after switching accounts in December 2023. Santander's actions in writing to Mr T about overdraft usage in 2022-2023 were reasonable first steps in line with regulatory expectations. After December 2023, Santander's decision to suspend the account in February 2024 and cease applying interest and charges was fair given Mr T's non-payment and lack of contact. The ombudsman could not confirm receipt of Mr T's December 2023 letter and noted Mr T did not chase a response or have Step Change contact Santander on his behalf.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website