NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY · DRN-6245090

The complaint Mr O complains that NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY (NatWest) irresponsibly entered into a fixed sum loan agreement with him. What happened In June 2019, Mr O applied for a loan with NatWest. He was given a loan for £3,000, to be repaid over 36 monthly repayments of around £108. Mr O complained that NatWest should not have provided him with the loan. He said that appropriate affordability checks hadn’t been completed and if they had NatWest would have seen that the loan was unaffordable for him. NatWest didn’t think that it had acted unfairly when lending to Mr O. I sent Mr O and NatWest my provisional decision on 5 March 2026. I explained why I was planning to uphold the complaint. I said: There isn’t a set list of checks NatWest was required to complete before lending to Mr O. The rules require it to ensure it carried out proportionate checks. What is proportionate will vary with each lending decision and takes into account things such as (but not limited to): the amount of credit, the size of the repayments, the cost of the credit, the purpose the credit was taken out for and the consumer’s circumstances. At the time Mr O applied for the loan with NatWest, he was already an existing customer and held a current account and credit card account with the business. NatWest says it would have completed a credit check although it can no longer provide the results of this check. It has provided the results of a check it did just before the loan application (as part of a different affordability assessment it carried out for Mr O for another product). The data from this check is a little unclear but appears to suggest there was no adverse information reported to credit reference agencies from Mr O’s other borrowing. NatWest says it would have also estimated Mr O’s essential living costs using statistical data. Based on the checks NatWest completed, it thought that Mr O could sustainably afford the loan repayments. However, Mr O says NatWest should have seen he was using his NatWest current account for gambling transactions and it should have realised he was struggling with this at the time of the loan application. As Mr O already had an existing customer relationship with NatWest, I consider it reasonable for NatWest to have taken into account any relevant information it already knew about Mr O when assessing the affordability and sustainability of this new loan. NatWest has explained that the amount of gambling transactions Mr O had completed were not enough to trigger its automated gambling policy alert, so it didn’t consider Mr O’s gambling to be problematic. However, I have seen copies of Mr O’s NatWest current account bank statements. I can see that Mr O excessively used his current account overdraft for gambling transactions in the years leading up to the application. There were frequently

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several gambling transactions on a daily basis, which I think should have concerned NatWest that Mr O could be struggling with this issue. I consider that NatWest should have seen that Mr O was gambling beyond his means as he was regularly using borrowing that NatWest had recently given to him (by way of the overdraft facility). Because of this I am minded to uphold this complaint because I don’t think a fair lending decision was made in the circumstances. Mr O confirmed that he agreed with the provisional decision. However, NatWest disagreed. 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. NatWest says that it fully credit scored the application. As explained in the provisional decision, NatWest has not provided evidence to show that a credit check was completed at the time of the application. However, I don’t think whether or not this check was completed is the crux of the matter here. What is significant is whether NatWest ought to have known at the time that Mr O was vulnerable due to his struggles with gambling. NatWest says that gambling is a legal pastime, however it still has checks in place for it. It says that Mr O was within its internal tolerance levels for gambling. I accept for some customers the occasional gambling transaction would be no cause for concern to lenders. However, I’m satisfied that the frequency of gambling transactions evidenced in Mr O’s statements, using borrowed funds from an overdraft facility that NatWest had recently given to him, is significant enough to make this decision to lend unfair. It ought to have been clear to NatWest at the time that Mr O was struggling with this issue and was vulnerable. In reaching my conclusions, I’ve also considered whether the lending relationship between Mr O and NatWest might have been unfair to Mr O under Section 140A of the Consumer Credit Act 1974. However, I’m satisfied that what I direct NatWest to do in the section below results in fair compensation for Mr O given the overall circumstances of his complaint. For the reasons I’ve explained, I’m also satisfied that, based on what I’ve seen, no additional award is appropriate in this case. My final decision I uphold Mr O’s complaint against NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY for the reasons explained above and direct NatWest to: • Add up the total repayments Mr O made to the loan and deduct these from the total amount of money he received. • If this results in Mr O having paid more than he received, any overpayment should be refunded along with 8% simple interest per year (calculated from the date the overpayments were made until the date of settlement). • It should also remove all adverse information regarding this account from Mr O’s credit file. • If any capital balance remains outstanding, arrange an affordable and sustainable repayment plan with Mr O. Once the balance is cleared, remove any adverse information in relation to this account from his credit file.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr O to accept or reject my decision before 20 April 2026. Jenny Hiltunen Ombudsman

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