Partially upheld: irresponsible lending, failure to act on vulnerability disclosure, poor complaint handling complaint against Kroo Bank Ltd

Decision detail

Summary

Mr J complained that Kroo irresponsibly lent him £10,000 in March 2024, failed to identify his gambling vulnerability, and treated him unfairly as a vulnerable customer. Mr J disclosed his gambling addiction in May 2025 and explicitly requested gambling transactions be blocked on 19 June 2025, but Kroo failed to act promptly and continued processing gambling transactions. The ombudsman found that while Kroo's credit checks were not proportionate, proportionate checks would not have changed the lending decision based on the information available at the time. However, the complaint was upheld regarding Kroo's failure to respond to Mr J's gambling vulnerability disclosure, failure to notify its Vulnerable Customer Team, and delays in providing support. The ombudsman awarded £200 compensation for the emotional distress and inconvenience caused by Kroo's failure to act on the vulnerability disclosure, rejecting Mr J's requests for loan write-off and refund of gambling transactions.

The Ombudsman's reasoning

The ombudsman found that while Kroo's credit checks were not proportionate, proportionate checks would not have revealed information that would have changed the lending decision. The declared income of £3,810 per month was verified via open banking and appeared regular and significant. The affordability calculations showed sufficient disposable income (£1,007) to cover the £198 monthly loan repayment. However, the ombudsman upheld the complaint regarding Kroo's handling of the gambling vulnerability disclosure. Kroo failed to act when Mr J disclosed his vulnerability in May 2025, failed to notify its Vulnerable Customer Team, and failed to respond promptly to explicit requests to block gambling transactions in June 2025. The ombudsman rejected the argument that compensation should extend to refunding gambling transactions, as even with earlier intervention, there was no guarantee the transactions would not have occurred. Compensation of £200 was awarded for the emotional distress and inconvenience caused by Kroo's failure to respond and support Mr J when he disclosed his vulnerability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website