HSBC UK Bank · DRN-6276272

The complaint Mr N complains that HSBC UK Bank Plc (HSBC) lent to him irresponsibly when making a loan without sufficient affordability checks. What happened Mr N applied for and was granted the following loan from HSBC. Date Amount of credit APR Loan term Monthly repayment November 2022 £22,010 9.9% 96 months £327.96 In summary, Mr N complains that HSBC failed to make reasonable and proportionate checks before granting the loan application. He says that had these taken place they would have shown he was living with an extensive and ongoing overdraft. Mr N says that HSBC would have seen he was increasingly reliant on credit and had clear and current signs of ongoing financial distress. Mr N complained to HSBC in January 2026 who considered his complaint, but didn’t uphold it. In their Final Response Letter dated February 2026 HSBC said proper affordability and repayment investigations had taken place and these showed the lending had been affordable. HSBC also say the lending had been in line with their policies. Mr N didn’t agree so brough the matter to this service later the same month. An investigator considered the merits of the case along with the available evidence from both parties. In his view, he said the checks performed by HSBC had been reasonable and proportionate. He also said affordability checks had revealed sufficient disposable income to suggest sustainable repayments could likely be made. He said on that basis the lending had been fair. Mr N disagreed with the view and has asked that this matter now comes to me 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. We’ve set out our approach to considering unaffordable and irresponsible lending complaints on our website – including the key relevant rules, guidance, good industry practice and law. In short, lenders must ensure that any credit that is approved is affordable and sustainable for the borrower. I’ve followed our approach when deciding Mr N’s complaint. I would like to thank Mr N for his focused response to the investigator’s view and I will address the substantive points he makes later in this decision. Recognising it will disappoint Mr N, having looked at the case and evidence myself, I find myself in agreement with the investigator’s view. I will explain why.

-- 1 of 3 --

On applying to HSBC, Mr N declared an annual income of £54,960. He applied for a £22,010 for a home improvement loan running over 96 months. HSBC state this was referred to their underwriting team given the size and term of the loan. HSBC validated Mr N’s income via account turnover (CATO) data and referenced his credit file. Having seen the relevant underwriting notes it is clear that no public records such as County Court Judgments or defaults were revealed by those checks. Neither were there any missed or late payments. Management of existing accounts appeared to be in well managed. HSBC then applied Mr N’s application data along with Office of National Statistics (ONS) modelling data to derive a more complete view of income and expenditure. Given the broadly positive credit file, the confirmation of income, the combination of actual and ONS data and the consideration of the application visible in the underwriting notes, I am persuaded to agree with the investigator in saying these checks were reasonable and proportionate to the lending. I will address the point Mr N makes in response to the investigator’s view. He asks me to consider that too much reliance was placed on ONS data rather than the actual lived experience faced by Mr N at the time. I have considered this carefully but am not persuaded there was anything to suggest ONS data wouldn’t be applicable in this case. I think it was reasonable for HSBC to use them as part of the evaluation process. I am also persuaded that HSBC considered affordability based on the evidence I have seen. I have reviewed the calculations provided by HSBC and those undertaken by the investigator. I have also undertaken my own and agree that the level of disposable income calculated is such that sustainable repayments could likely be made. I have considered Mr N’s comments on the investigator’s view where he suggests his existing commitments were such that further lending shouldn’t have been made. Having seen the evidence provided by HSBC there is nothing I have seen that would suggest ongoing and current financial difficulties. I say this because of the lack of adverse findings on the credit file and the calculated disposable income. Having reviewed the evidence available on this case, I think that the lending decision was a fair. In reaching my conclusions, I’ve also considered whether the lending relationship between Mr N and HSBC might have been unfair to Mr N under s140A of the Consumer Credit Act 1974 (“CCA”). However, for the reasons I’ve already explained, I’m satisfied that HSBC did not lend irresponsibly when providing Mr N with the loan. I haven’t seen anything to suggest that s140A CCA would, given the facts of this complaint, lead to a different outcome here. My final decision My final decision is that I don’t uphold Mr N’s complaint against HSBC UK Bank Plc Under the rules of the Financial Ombudsman Service, I’m required to ask Mr N to accept or reject my decision before 26 May 2026. Richard Bellamy

-- 2 of 3 --

Ombudsman

-- 3 of 3 --