Not upheld: Irresponsible lending complaint against Bank of Scotland plc

Decision detail

Summary

Miss S complained that Bank of Scotland lent to her irresponsibly by failing to make adequate affordability checks before granting her a £5,000 loan in August 2025. Miss S was unemployed, in significant debt, and experiencing personal difficulties at the time. Bank of Scotland rejected the complaint, stating the loan was affordable based on her income. The ombudsman agreed the checks were not reasonable or proportionate but found that proper checks would have revealed approximately £900 monthly disposable income, sufficient to sustain the loan repayments. Since Miss S's personal circumstances were not disclosed to the bank, they could not have formed part of the lending decision. The complaint was not upheld.

The Ombudsman's reasoning

While the ombudsman agreed that Bank of Scotland's checks were not reasonable or proportionate to the lending, this alone was insufficient to establish irresponsible lending. The ombudsman examined what reasonable and proportionate checks would have revealed using Miss S's bank statements as evidence. The calculations showed approximately £900 per month disposable income, with additional discretionary spending that could have been reduced. Although Miss S was experiencing personal difficulties, these were not communicated to Bank of Scotland before the lending decision and therefore could not have formed part of their assessment. The available evidence demonstrated the loan was sustainable and the lending decision was fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website