Not upheld: Irresponsible lending complaint against Vanquis Bank Limited

Decision detail

Summary

Miss B complained that Vanquis Bank Limited irresponsibly provided her with a credit card account opened in October 2014 with an initial limit of £250 and three subsequent credit limit increases to £1,000, £2,000, and £3,000 respectively. Miss B argued the credit was unsustainable, particularly as she was on maternity leave from December 2015 and using her overdraft facility. The ombudsman found the complaint not upheld, determining that the lending was not shown to be unaffordable given Miss B's stated income of £21,000, the modest initial credit limit, VBL's credit checks showing no adverse information, and Miss B's demonstrated ability to manage the account, despite some later payment issues that had been resolved by the time of the final increase.

The Ombudsman's reasoning

The ombudsman determined that VBL was required to carry out proportionate affordability checks, but found no need to make a finding on whether checks were proportionate because the lending was not shown to be unaffordable. The initial credit limit of £250 was modest given Miss B's stated income of £21,000 and lack of adverse credit history. The first two CLIs were also relatively modest amounts, and Miss B had demonstrated she could manage the account. By the third CLI in December 2016, although there had been some payment issues, the account was back in order and credit checks showed no material concerns. The evidence of overdraft usage and maternity leave did not demonstrate that the lending was unaffordable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website