Not upheld: irresponsible lending - inadequate affordability assessment complaint against Monzo Bank Limited

Decision detail

Summary

Miss G complained that Monzo lent to her irresponsibly when it provided a £11,550 loan in May 2024 to be repaid over 60 months. She made successful repayments until late 2025 when she reported financial difficulties. The ombudsman found that while Monzo's affordability checks were not sufficiently thorough and should have independently verified her actual monthly expenditure, a more proportionate check would still have concluded she could afford the repayments sustainably. Based on examination of her bank statements, her declared income was reasonable, Monzo's expenditure estimates were reasonable, and she would have had disposable income available. The complaint was not upheld as the subsequent difficulties were not reasonably foreseeable at the time of lending.

The Ombudsman's reasoning

The ombudsman found that while Monzo's affordability checks were not sufficiently proportionate and should have included independent verification of actual monthly expenditure, a more thorough check would still have shown Miss G could afford the repayments sustainably. The ombudsman examined Miss G's bank statements and found her declared income was reasonable, Monzo's expenditure estimates were reasonable, and when combined with visible debt repayments, Miss G would have had disposable income available. The fact that Miss G later faced difficulties does not indicate irresponsible lending, as circumstances can change over a lengthy repayment period unless those changes were reasonably foreseeable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website