Not upheld: Irresponsible lending complaint against Zopa Bank Limited

Decision detail

Summary

Mr R complained that Zopa Bank Limited lent irresponsibly when it provided him with a £9,000 loan in December 2023 with monthly repayments of around £301. Mr R had declared an annual income of £42,000 and had approximately £32,800 of unsecured debt. The ombudsman found that while Zopa Bank should have conducted more thorough checks given the size of Mr R's existing commitments, such checks would not have revealed affordability issues. The ombudsman noted that Mr R's income was supported by bank statements, his housing costs were reasonable, his credit file showed no signs of payment difficulties, and the loan was intended for debt consolidation which would have reduced his overall monthly credit costs. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman acknowledged that Zopa Bank should have conducted more proportionate checks given the size of Mr R's existing commitments relative to his income. However, the ombudsman concluded that such checks would not have revealed affordability issues because: Mr R's declared income of £42,000 was supported by bank statements; his housing costs were reasonable; his credit file showed no signs of struggling with existing commitments; and the debt consolidation purpose would have reduced his overall monthly credit costs. The ombudsman also considered the wider context of Mr R's circumstances but found insufficient evidence that further checks would have shown he could not sustainably repay the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website