Not upheld: Irresponsible lending complaint against Monzo Bank Limited

Decision detail

Summary

Miss W complained that Monzo Bank Limited irresponsibly provided her with two loans in June 2023 (£3,000) and June 2024 (£2,334.98), citing concerns about overdraft dependency and her medical condition affecting her vulnerability. The ombudsman found that Monzo conducted reasonable and proportionate affordability checks for both loans, with Miss W's verified income and calculated disposable income (after housing, credit commitments, and essential spending) being sufficient to support repayment. Miss W had no defaults or missed payments and successfully repaid Loan 1 before taking Loan 2. The ombudsman noted that Miss W did not disclose her medical condition to Monzo at the time of lending and nothing in the checks would have revealed it. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Monzo's affordability checks were reasonable and proportionate for both loans. For Loan 1, Miss W's verified income of £1,695 monthly, after deducting housing costs (£398), credit commitments (£300), and essential spending (£611), left disposable income of £336 (£211 after affordability buffer) to cover the new loan. For Loan 2, her verified income of £1,955 monthly, after similar deductions, left disposable income of £411 (£286 after buffer). The ombudsman found no evidence that Miss W was overindebted or reliant on credit, and her successful repayment of Loan 1 further supported the fairness of Loan 2. Miss W's medical condition was not disclosed to Monzo and nothing in the checks would have revealed it.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website