Bank of Scotland plc · DRN-6293168

The complaint Mr C complains that Bank of Scotland plc trading as Halifax (Halifax) acted irresponsibly when they agreed to lend to him. What happened In July 2022, Mr C successfully applied for a credit card with Halifax with a limit of £4,300. Mr C says that this was not affordable as his income was irregular at the time and he was self- employed on and off and reliant on credit. Once he received the card, he was only able to make minimum payments for a prolonged period without the balance reducing. He says he already had multiple cards with high utilisation at the time. He struggled with his mental health while he had this card and later entered into a Debt Management Plan (DMP) in August 2024. Mr C complained to Halifax in November 2025. Halifax said that they thought the lending was fair. They also found that the account was well managed over the following two years and that there were no credit limit increases, but there was a decrease in July 2024. In March 2025 the account was sold after defaulting in January 2025. Mr C wasn’t happy with Halifax’s response and referred his complaint to us. Our investigator said that they didn’t think the checks which Halifax carried out were proportionate. They asked Mr C to provide copies of his credit file and bank statements to show what information would have been available, but Mr C didn’t provided these. The investigator said they hadn’t seen enough to determine that Halifax made an unfair decision to lend. Halifax didn’t dispute this position, but Mr C did. In summary, he said the fact that the checks weren’t proportionate should mean the complaint is upheld, particularly as there was significant existing credit across related lenders, which should have been identified through appropriate checks. Ultimately a resolution wasn’t made, so the case has been passed to me to decide. 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.

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I’ve considered what both parties have said about Mr C’s lending with Halifax. Having carefully considered everything, I think that Halifax acted fairly and reasonably. The relevant rules, regulations, and guidance at the time of Halifax’s lending decision required them to carry out proportionate checks. While there isn’t a defined list of checks a lender needs to carry out, such checks should be proportionate, considering things like the type, amount, duration and total cost of the credit, as well as the borrower’s individual circumstances. These checks needed to assess Mr C’s ability to afford the credit being approved and to be able to repay it sustainably, without causing him financial difficulties or harm. It isn’t sufficient for Halifax to just complete proportionate checks, they must also consider the information obtained from these checks to make fair lending decisions. I’ve considered the checks Halifax did and what they found from these checks. In July 2022, Mr C applied for a credit card with Halifax with a credit limit of £5,000. He was approved a card with a limit of £4,300. During his application, Mr C declared he was employed with an annual salary of £29,000. Halifax used current account turnover (CATO) information to confirm this was accurate, and found he had a net monthly income of £1,932. Mr C declared he was renting, with housing costs of £350 per month and had other existing monthly commitments of £350. Halifax completed a credit check and found his existing unsecured credit commitments totalled £731 per month at the time. Mr C declared no dependents, and Halifax found that he had monthly essential living costs of £452 per month. Taking into account Mr C’s net monthly income, his declared housing costs and an additional £50 housing buffer, Mr C’s existing monthly credit commitments and his estimated other living costs of £452, Halifax found that he had a monthly disposable income of £349. If the account were to be fully drawn, the amount that would be required to repay this in a reasonable amount of time would be around £215 per month, so I think this was a sufficient amount for the lending to be affordable. Halifax reviewed Credit Reference Agency (CRA) data, which found that there were no recent defaults, no County Court Judgments, bankruptcies or non-mail order defaults. There had been one credit search in the last six months. The information available gave Halifax an idea of Mr C’s financial situation which indicated he was managing existing credit well and had sufficient disposable income to afford repayments. However, taking into account the size of Mr C’s disposable income and the size of the credit limit being offered, I think that Halifax should have asked some further questions about Mr C’s monthly essential spending to satisfy themselves the lending was sustainable. I therefore need to consider what reasonable and proportionate checks would have found had they been carried out. Our investigator requested information from Mr C to assist with this on several occasions, and it was also noted in their findings that they were not able to reach a conclusion as there was not sufficient evidence. This information has still not been provided and I haven’t been able to reach a conclusion about what reasonable and proportionate checks would have shown about Mr C’s expenditure at the time. As such, I do not have sufficient information to determine that the decision to lend was not fair and I do not think that Halifax need to take further action here based on the information available.

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It is further noted that, Halifax needs to act with forbearance. There’s no fixed method by which this is to be achieved. As the circumstances of each individual borrower is different, a business needs to tailor their actions to take account of the customer’s needs. But it is up to each business to decide what steps are taken to assist each customer. I’ve considered what actions Halifax has taken once learning of Mr C’s financial difficulties and if there was anything that ought to have prompted them to act earlier. The account had a promotional interest rate on balance transfers, and Mr C made a balance transfers for over £3,000 in September 2022. He paid this off in full the following month. The card wasn’t used again until April 2023. From this point, payments were made on time for at least the minimum required until August 2024, when Mr C ran into financial difficulty. The total of the repayments to the account during this time far exceeded the amount of interest and fees being charged, and the balance did decrease at times while the account continued to be used. Mr C was never overlimit, and the balance only exceeded £4,000 in January 2025 around when the account defaulted. I don’t think there was enough prior to August 2024 that ought to have prompted Halifax to have concerns that Mr C was facing financial or other difficulties. Mr C went on a DMP in August 2025. No interest was charged on the account from this time. Smaller payments continued to be received on the account until it was defaulted five months later. I think that Halifax acted fairly in this regard once learning the account was no longer affordable. While I would expect Halifax to continue to act with forbearance, I do not think that Halifax needed to take further action in this regard. In reaching my conclusions, I’ve also considered whether the lending relationship between Mr C and Halifax might have been unfair to Mr C under Section 140A of the Consumer Credit Act 1974 (“CCA”). However, for the reasons I’ve already explained, I’m satisfied that Halifax did not lend irresponsibly when providing Mr C with the credit card or otherwise treat him unfairly in relation to this matter. And I haven’t seen anything to suggest that Section 140A CCA would, given the facts of this complaint, lead to a different outcome here. So, while it will likely come as a disappointment to Mr C, I won’t be upholding his complaint against Halifax for the reasons explained above. My final decision For the reasons given above, I do not uphold this complaint against Bank of Scotland plc trading as Halifax. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 25 May 2026. Frances Kerslake Ombudsman

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