Upheld: Irresponsible lending complaint against Santander UK Plc
Financial Ombudsman decision DRN-6443570 of 2026-06-30T00:00:00+00:00. Irresponsible lending complaint against Santander UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6443570 |
|---|---|
| Decision date | 2026-06-30T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Santander must: (1) Add up total repayments Miss D made and deduct from total money received; (2) If Miss D overpaid, refund overpayments with time-weighted Bank of England base rate plus 1% simple interest per year from date of overpayment until settlement; (3) If capital balance remains, arrange an affordable and suitable payment plan with Miss D; (4) Remove all adverse information regarding this account from Miss D's credit file once the balance is cleared or if overpaid. |
Summary
Miss D complained that Santander lent to her irresponsibly by failing to make adequate affordability checks before granting a restructuring loan of £6,585.55 in May 2023. Miss D had contacted Santander indicating she was struggling to repay her existing loan. The ombudsman found that Santander's checks were not reasonable and proportionate, as income was not verified and the affordability assessment was inadequate. Analysis of Miss D's actual financial records showed she had negative disposable income of approximately £64 per month, making the loan unaffordable and unsustainable. The ombudsman upheld the complaint and ordered Santander to refund interest and charges, remove adverse credit file information, and arrange an affordable payment plan for any remaining capital balance.
The Ombudsman's reasoning
The ombudsman agreed with the investigator that the checks performed by Santander were not reasonable and proportionate to the lending. Although Santander argued the restructuring improved Miss D's position by reducing monthly outgoings and the deficit, the ombudsman found that with negative disposable income, the likelihood of sustainable repayment would be extremely low. The ombudsman noted that income was not verified, the credit file was not fully shared, and the call recording was not retained. Reasonable and proportionate checks would have revealed Miss D's negative disposable income and shown the lending was unaffordable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,522 | 22% |
| Irresponsible lending, all decisions | 30,770 | 37% |
| Personal loan, all decisions | 22,885 | 29% |
Source
Read the original decision on the Financial Ombudsman Service website