Upheld: Irresponsible lending complaint against THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY
Financial Ombudsman decision DRN-6434230 of 2026-06-17T00:00:00+00:00. Irresponsible lending complaint against THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY. Outcome: Upheld.
Decision detail
| Reference | DRN-6434230 |
|---|---|
| Decision date | 2026-06-17T00:00:00+00:00 |
| Firm | THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | RBS must: (1) remove all interest, fees and charges applied to the loan; (2) deduct payments Mrs F made from the original £24,000 balance, treating any amounts over £24,000 as overpayments to be refunded; (3) add 8% per year simple interest on any overpayments from the date made to settlement (with tax deduction as required by HMRC); (4) if an outstanding balance remains, contact Mrs F to arrange a suitable repayment plan. |
Summary
Mrs F complained that RBS irresponsibly provided her with a £24,000 loan in July 2025 that was unaffordable based on her monthly salary of £1,222 and her stated use of the loan for gambling. RBS approved the loan online based on declared income and CRA checks, arguing it met their lending criteria. The ombudsman upheld the complaint, finding that while RBS verified Mrs F's income, they failed to properly assess whether she could sustainably repay nearly £500 monthly from her £600 disposable income over five years, and improperly relied on her husband's business income. RBS was ordered to remove all interest and charges, refund overpayments with 8% interest, and arrange a suitable repayment plan for any remaining balance.
The Ombudsman's reasoning
RBS was required to conduct a reasonable and proportionate affordability assessment that was borrower-focused and considered whether Mrs F could sustainably repay the loan. While RBS verified Mrs F's declared income of approximately £1,222 per month and identified around £600 in disposable income, they failed to properly assess sustainability. Mrs F would need to repay nearly £500 per month (the loan repayment) out of her £600 disposable income for five years. The larger payments visible in her account were from her husband's business and therefore not reliable sources of her own income. RBS's reliance on these business-related transactions and failure to consider the sustainability of repayments over the full term constituted irresponsible lending.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY, all decisions | 19 | 24% |
| Irresponsible lending, all decisions | 30,675 | 37% |
| Personal loan, all decisions | 23,643 | 29% |
Source
Read the original decision on the Financial Ombudsman Service website