Upheld: Irresponsible lending complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance
Financial Ombudsman decision DRN-6459389 of 2026-06-29T00:00:00+00:00. Irresponsible lending complaint against Clydesdale Financial Services Limited trading as Barclays Partner Finance. Outcome: Upheld.
Decision detail
| Reference | DRN-6459389 |
|---|---|
| Decision date | 2026-06-29T00:00:00+00:00 |
| Firm | Clydesdale Financial Services Limited trading as Barclays Partner Finance |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | 1) Refund all repayments under the Credit Agreement including sums paid to settle the debt and cancel any outstanding balance. 2) Refund annual management charges paid for Fractional Club membership. 3) Add simple interest at 8% per annum to each Net Repayment from the date made until settlement. 4) Remove any adverse information recorded on Mr A's credit file in connection with the Credit Agreement within six years of the decision. 5) If Fractional Club membership is still in place, the Lender must indemnify Mr A and Mrs A against all ongoing liabilities provided they agree to hold the benefit of their interest in the Allocated Property for the Lender or assign it to the Lender. |
Summary
Mr A complained that Clydesdale Financial Services Limited (trading as Barclays Partner Finance) lent to him irresponsibly when he borrowed £12,984 to purchase Fractional Club membership in August 2014. The loan was to be repaid over 15 years at 17.7% APR, totalling approximately £35,022. The Ombudsman found the Lender's automated creditworthiness assessment, based only on loan application information and credit reference agency data, was insufficient given the circumstances: a substantial discretionary purchase for a family with two children where Mr A's income comprised the vast majority of household income. Had the Lender conducted reasonable checks into Mr A's household expenditure, it would have discovered his total monthly outgoings (approximately £2,200) far exceeded his net monthly income (£1,805), making the loan unaffordable. The complaint was upheld and the Lender was directed to refund all repayments plus interest, refund management charges, remove adverse credit file entries, and indemnify Mr A and Mrs A against ongoing Fractional Club liabilities.
The Ombudsman's reasoning
The Ombudsman found that the Lender's reliance on limited information from the loan application and CRA data did not constitute reasonable and proportionate checks given the circumstances: a substantial loan of £12,984 over 15 years at 17.7% APR for a discretionary purchase, where Mr A's income comprised the vast majority of household income for a family with two children. The Lender should have sought further information about Mr A's household expenditure. Based on Mr A's testimony (corroborated by ONS data) showing monthly household expenditure of approximately £1,500, plus existing borrowing commitments of £702, Mr A's total monthly outgoings were approximately £2,200, far exceeding his net monthly income of £1,805. Therefore, the Lender should have concluded Mr A could not afford to sustainably repay the loan and should have declined the application. The Lender's arguments about Mr A settling the loan early and taking on other credit post-sale were rejected as they post-dated the Time of Sale and did not demonstrate the Lender fulfilled its obligations at the time of lending.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Clydesdale Financial Services Limited trading as Barclays Partner Finance, all decisions | 112 | 4% |
| 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