Upheld: Irresponsible lending complaint against Zopa Bank Limited
Financial Ombudsman decision DRN-6459666 of 2026-07-01T00:00:00+00:00. Irresponsible lending complaint against Zopa Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6459666 |
|---|---|
| Decision date | 2026-07-01T00:00:00+00:00 |
| Firm | Zopa Bank Limited |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Remove any interest and charges outstanding on the loan and treat all payments made as payments towards capital; if payments exceed capital borrowed, refund overpayments with simple interest at Bank of England base rate + 1% from the date overpayments arose; if capital remains outstanding, Zopa should take a sympathetic view when agreeing an affordable repayment plan; remove any adverse credit file information once the loan is fully repaid. |
Summary
Mrs M complained that Zopa lent to her irresponsibly when she borrowed £5,000 in November 2025. Although Zopa conducted proportionate initial affordability checks, it failed to respond appropriately to credit file information showing Mrs M had taken multiple loans in quick succession. The ombudsman found that further enquiries into Mrs M's bank statements would have revealed severe financial stress from gambling spending totalling over £60,000 in the month before application. The ombudsman concluded that any responsible lender would have declined the application, as repayments were essentially dependent on gambling success. Zopa was directed to remove all interest and charges, treat payments as capital repayment, and remove adverse credit file information.
The Ombudsman's reasoning
Whilst Zopa's initial affordability checks were proportionate to the loan application, the firm failed to react appropriately to the information revealed by those checks. The credit check showed Mrs M had taken multiple loans in quick succession, contradicting her debt consolidation claim. This should have prompted further enquiries. Bank statements would have revealed severe financial stress from gambling spending, making it impossible to assess whether repayments could be sustainably afforded. Any responsible lender would have concluded the loan was likely being requested to fund further gambling and should have declined the application.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Zopa Bank Limited, all decisions | 582 | 27% |
| 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