Not upheld: Irresponsible lending complaint against HSBC UK Bank Plc trading as M&S Bank

Decision detail

Summary

Mr S complained that M&S lent to him irresponsibly and failed to support him when he was struggling financially. Mr S took out a £4,000 credit card in May 2019, initially using it for balance transfers, but from late 2022 began making only minimum payments and experienced late payments in 2023 and a late charge in 2024. M&S identified persistent debt in March 2024 and wrote to Mr S offering support, and when Mr S requested interest freezing in July 2025, M&S directed him to its financial support team. The ombudsman found M&S had conducted proportionate affordability checks at the time of lending, made a fair lending decision, and took appropriate action when signs of difficulty emerged, including compliance with persistent debt rules. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the Consumer Credit Act 1974 to assess whether the lending relationship was unfair. At the time of lending in 2019, M&S carried out proportionate affordability checks including credit file review, income verification, assessment of existing debts, and modelled essential costs, finding Mr S had over £600 monthly disposable income. The ombudsman found no evidence that the lending decision was unfair. Regarding subsequent conduct, the ombudsman found that making minimum payments alone was not a clear sign of financial difficulty, particularly as Mr S had cleared the balance in July 2022. The late payments in June and July 2023 were isolated incidents with no charges applied, and M&S appropriately wrote to Mr S. When persistent debt was identified in March 2024, M&S took appropriate action under persistent debt rules by writing to Mr S and offering support options. The ombudsman found Mr S's account conduct did not demonstrate unsustainability from the statements, and M&S appropriately directed Mr S to the financial support team when he requested interest freezing in July 2025. The ombudsman concluded the relationship was not unfair and M&S did not act unfairly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website