Lloyds Bank PLC · DRN-3139694

The complaint Mr P is unhappy that Lloyds Bank PLC approved him for a credit card account which he feels was unaffordable for him at that time. What happened In February 2013, Mr P was approved by Lloyds for a credit card account with an initial credit limit of £7,000. In June 2020, Mr P raised a complaint with Lloyds because he felt that the credit that was provided to him by Lloyds in 2013 hadn’t been affordable for him at that time. Lloyds looked at Mr P’s complaint, but they felt that because Mr P had raised his complaint about the provision of credit more than six years after the event, that Mr P had made his complaint too late such that Lloyds didn’t reasonably have to consider it. Mr P wasn’t satisfied with Lloyds response, so he referred his complaint to this service. It was decided by an ombudsman that the merits of Mr P’s complaint could be considered by this service, and the complaint was then passed to one of our investigators to review accordingly. But our investigator felt that the information that was available to them from the time of the provision of credit in February 2013 didn’t appear to demonstrate that Mr P’s financial position at that time was such that it could be reasonably concluded that Mr P most likely couldn’t afford the credit that Lloyds provided to him. And because of this, our investigator didn’t uphold Mr P’s complaint. Mr P remained dissatisfied, so the matter was escalated to an ombudsman for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Lloyds have explained that, because of the length of time that has elapsed since the initial provision of credit in February 2013, they no longer retain a record of the creditworthiness assessment that they undertook on Mr P before offering him that credit. This seems reasonable to me, and it wouldn’t be expected by this service that Lloyds would have retained this information beyond the six years that such information is usually held. However, this makes it somewhat difficult to corroborate Mr P’s claim that his financial position in February 2013 was such that he couldn’t afford the credit account with a £7,000 credit limit that Lloyds approved him for at that time. Mr P has provided a detailed testimony of why he feels that his financial position in 2013 was such that the provision of credit to him shouldn’t have taken place. But as an impartial dispute resolution service, our approach in a situation such as this is to base our decisions,

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as much as reasonably possible, on the documentary information and evidence that’s been presented to us. In this instance, while Lloyds haven’t been able to provide a copy of the creditworthiness assessment that they undertook on Mr P at that time, they have been able to provide copies of Mr P’s Lloyds current account statements for the period leading up to the provision of credit in February 2013. And, having reviewed these statements, I don’t feel that I can fairly or reasonably conclude that they show that Mr P was in demonstrable financial difficulty at that time, such that Lloyds shouldn’t have provided the credit account to him. I say this for several reasons, including that it’s evident from the statements that Mr P was employed and in receipt of monthly income. It’s also evident that Mr P was able to maintain the balance of his account in credit for most of that period, and only used a portion of his agreed overdraft on one occasion, during which time he didn’t exceed the agreed overdraft limit. I also feel that the statements demonstrate a notable amount of non-essential spending, all of which leads me to conclude that there is nothing within these statements that demonstrate that Mr P was in financial difficulty at that time to a degree where it’s apparent that Lloyds shouldn’t have offered credit to him. Mr P has stated that he had several doorstep loans at that time which he was repaying via cheque and that several of these cheques had been returned as unpaid, and that this highlights the difficult financial position that he was in. I can appreciate Mr P’s position here, but while I do note that several payments were made by cheque in the months leading up to the provision of credit, I don’t feel that the cumulative amount of these payments was excessive in relation to the income that Mr P was receiving and how he otherwise managed his current account, I also note that none of these cheque payments were returned and that the balance of Mr P’s current account was sufficient at all times for each cheque to be honoured. I will once again acknowledge the limitations of this assessment, which takes place nearly nine years after the event in question and as such without several pieces of information that would usually be reviewed and assessed. However, on the basis of the information I do have available to me, I don’t feel that I can fairly or reasonably conclude that Lloyds should have determined that Mr P’s financial position in 2013 was such that they shouldn’t have offered the credit to him that they did, and it seems to me that the picture of Mr P’s financial position that can be gained from the current account statements does, more likely than not, corroborate Lloyds position that they did undertake an affordability assessment at that time, the result of which was that Mr P would in all likelihood be able to afford the credit being provided to him. It follows from this that my final decision here will be that I won’t be upholding this complaint or instructing Lloyds to take any further action at this time. I realise that this won’t be the outcome that Mr P was wanting, but I hope that he’ll understand, given all that I’ve explained, why I’ve made the final decision that I have. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 3 February 2022.

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Paul Cooper Ombudsman

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