Not upheld: Irresponsible lending complaint against National Westminster Bank Public Limited Company

Decision detail

Summary

Miss C complained that NatWest irresponsibly provided her with an overdraft facility that became unaffordable and that she became dependent on for day-to-day living costs over a 15-year period. The facility started at £500 in 2013 and was increased to £2,000 by 2014, remaining interest-free until November 2018 when it became partially interest-bearing. The ombudsman reviewed Miss C's bank statements from 2018 onwards and found that her account was generally well-managed with regular income, discretionary spending, and only sporadic instances of exceeding the limit or returned payments. Although Miss C was a repeat overdraft user, the ombudsman concluded that proportionate monitoring would not have revealed financial difficulties warranting refusal to renew the facility, and that NatWest could not have identified vulnerabilities from account management alone since Miss C did not disclose her personal circumstances until 2025. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied section 140A of the Consumer Credit Act 1974 to assess whether the relationship between NatWest and Miss C was unfair. While the facility was initially interest-free (providing no basis for financial redress), the ombudsman focused on the November 2018 renewal and subsequent ongoing provision. Based on a review of Miss C's bank statements, the ombudsman found that: (1) Miss C's account was generally well-managed with regular income and discretionary spending capacity; (2) there were only sporadic instances of exceeding the limit or returned payments, not consistently demonstrating financial difficulties; (3) Miss C had minimal committed non-discretionary payments; (4) the pattern suggested money management rather than actual financial difficulty; and (5) Miss C did not disclose her personal circumstances to NatWest until 2025, so NatWest could not have identified vulnerabilities from account management alone. The ombudsman concluded that proportionate checks would have shown Miss C could afford to repay the facility over a reasonable period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website