Consumer Credit General

A lender must offer loan products suitable for the borrower's circumstances and clearly communicate if no suitable product is available.

A bank should not hold a consumer personally liable for a loan when the bank was aware the intended borrower was a limited company, application discrepancies indicated this, and the bank failed to clarify the borrower's identity before issu

A lender can be party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 where the supplier breaches Regulation 14(3) of the Timeshare Regulations by marketing timeshare membership as an investment.

Banks should demonstrate empathetic forbearance and seek mutually acceptable solutions for customers in financial difficulty who proactively identify problems, rather than waiting for them to become critical.

A lender must provide sufficient information about break costs and consequences of fixed rate products, though it is not required to provide suitability advice on product choice.

A lender is not liable for consequential losses claimed by a borrower unless those losses are sufficiently evidenced and causally linked to the lender's delay.

A bank must clearly communicate the type of loan product being applied for and should not cause avoidable delays in processing applications for government-backed lending schemes due to its own administrative errors.

A lender's decision to decline a CBIL application on affordability grounds is within its rights where the borrower's turnover is insufficient to support repayment, and compensation is appropriate for service delays but not for a declined ap

A lender is not responsible for delays in providing funds during unprecedented circumstances if the delays were not unreasonable, even if the consumer suffered business losses as a result.

A lender is entitled to apply its standard risk appetite and documentation requirements consistently, even for government-backed schemes, provided the decision is not applied unreasonably.

A lender is not obliged to provide direct debit arrangements if alternative payment methods are specified in the loan agreement, and a borrower's failure to transfer funds to a designated servicing account cannot be attributed to the lender

A bank is liable for failing to execute a customer's clear instruction to fix an interest rate, but the customer's failure to identify the error through reasonable opportunity to mitigate reduces the bank's responsibility proportionally.

A lender is not required to refund interest or restructure repayments where the total amount payable over the loan's life remains the same as originally proposed, even if the monthly payment structure differs.

A bank must release security promptly upon full repayment of a loan, and compensation for delay should reflect demonstrable financial loss caused by that delay.

A lender is not responsible for a borrower's failure to take independent action to apply for a loan modification when the borrower was aware of the requirement and the lender failed to provide promised assistance.

A bank should identify and rectify mismatches between an application form and loan agreement details rather than automatically generating agreements based on account details when the applicant's stated intentions differ.

A lender must provide clear and accurate information about financial products and not report adverse credit information when payment difficulties arise from the lender's own failures in communication and service delivery.

A creditor must report fair, accurate and up-to-date information to credit reference agencies, and must not prevent a consumer from making payments towards their debt.

A lender must correctly action a consumer's cancellation of a credit agreement during the cooling-off period and must handle complaints diligently to avoid compounding errors.

A lender must not record a default if a suitable arrangement to pay arrears has been agreed and is being maintained, in accordance with ICO guidance on reporting defaults.

Under the Consumer Rights Act 2015, goods must be of satisfactory quality, with a presumption of fault within six months; after six months, the consumer must prove the goods were not of satisfactory quality.

Goods supplied under a consumer credit agreement must be of satisfactory quality, and the consumer must follow the contractual procedure for faults by returning the device to the lender rather than the manufacturer.

A lender providing a fixed-sum loan agreement for a mobile phone is responsible for reasonable steps to protect the device when reported stolen, but is not liable for fraud losses that may have occurred through alternative means despite del

A lender must remove account restrictions promptly once the reason for the restriction (a debt relief order) has been successfully completed.

Banks must treat customers in financial difficulties fairly by considering their situation positively and sympathetically, and exploring appropriate support arrangements rather than directing them toward default.

A service provider can apply their contractual terms fairly to refuse a handset exchange where the device fails to meet specified conditions, even where the consumer's failure to comply was unintentional.

A lender must promptly close a fixed sum loan agreement when the borrower returns the financed item, and must correct any resulting adverse credit file entries.

A lender must update internal records promptly when a fixed sum loan has been fully repaid to avoid preventing the consumer from accessing further credit or switching providers.

A misrepresentation in a consumer credit agreement entitles the consumer to be put back in the position they would have been in had the misrepresentation not occurred, not to benefit from the false statement.

A lender must carry out proportionate checks that reflect the risk profile of the borrower before lending, and must not lend irresponsibly even if some basic affordability checks suggest the loan may be affordable.

A provider must give clear payment instructions and support vulnerable consumers in financial difficulty, and cannot terminate a payment arrangement without clear evidence of breach.

A supplier cannot fairly demand payment under a regulated consumer credit agreement for goods which were not supplied, particularly where they fail to provide credible evidence supporting delivery of the goods.

A consumer acting under a Lasting Power of Attorney who consents to a loan remains liable for it even if they were deceived by a scammer, but the lender should not benefit from interest charges on funds used for fraudulent purposes.

A lender must communicate clearly and respond to consumer queries in a timely manner, particularly when the consumer is experiencing financial difficulty.

A lender must take fair action to remedy errors that cause a consumer to fall into arrears, including removing defaults from credit files when the arrears resulted from the lender's mistake.

A lender must take reasonable steps to clearly communicate to a consumer when only a partial settlement has been made, particularly when arrears are accruing on remaining agreements.

A lender must fairly resolve complaints about wrongful termination of a consumer credit agreement and provide reasonable remedies where reinstatement is not technically possible.

A lender must ensure it carries out appropriate affordability checks and is not complicit in a supplier's misrepresentation of products, pricing, or the credit agreement terms.

A lender must ensure that credit agreements involving incentivised discounts clearly disclose the total cost of financing and the conditions necessary to benefit from those incentives.

A lender is not party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 solely because a timeshare product was marketed as an investment or sold through potentially problematic sales practices, absent evide

A lender is not party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 merely because a broker lacked authorization or because the debtor felt pressured during the sales process, provided the lending was a

A creditor may be held liable under section 140A CCA for unfair conduct by a supplier in a related agreement, but the relationship is only unfair if supported by evidence of actual misconduct or misrepresentation.

A lender is not party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 merely because of alleged improper broker conduct, unfair sales practices, or unfair contract terms, absent demonstrable financial los

Banks retain discretion over lending criteria and credit decisions under Government-backed loan schemes, even where government guarantees are available.

A credit relationship is unfair under Section 140A of the Consumer Credit Act 1974 only if the creditor was party to conduct that caused the consumer to suffer financial loss or detriment.

Under the Consumer Rights Act 2015, goods supplied under a hire agreement must be of satisfactory quality, which for a new car means meeting the standard a reasonable person would consider satisfactory having regard to its description, pric

A bank is not obliged to accept a settlement offer on a commercial business loan, even when the loan has government backing, and commercial loans do not carry the same protections as regulated personal loans.

Banks retain commercial discretion to decline lending applications, including government-backed schemes, provided the assessment is conducted fairly.

A lender is not required to provide financial support to a borrower who fails to provide requested financial information necessary to assess their circumstances.

A lender is not liable for arrears caused by their own administrative error in handling a borrower's request for assistance if the underlying forbearance option requested was not a mandatory requirement under the loan scheme.

The Financial Ombudsman Service can only consider complaints about regulated lending activities and matters ancillary to lending, not separate funding mechanisms like capital investment introductions or complaint handling processes.

A bank is entitled to issue a formal demand and transfer a loan to recoveries when the borrower fails to maintain contact and does not complete required account setup, even if the bank made initial errors in account management.

A corporate guarantee covering all debts between parties remains enforceable for subsequently incurred borrowing regardless of whether the guarantor was notified at the time of the new debt.

A lender is entitled to discretion in assessing affordability based on a borrower's account history and cashflow, and it is fair to decline lending if the borrower cannot demonstrate sufficient capacity to afford repayments.

The FOS can only assess fairness in dealing with regulated financial matters, not the regulatory compliance or complaint handling procedures of a business.

A lender's right to pursue arrears is justified where the borrower failed to make a payment that fell due before a variation agreement came into effect.

A Bounce Back Loan guarantee protects the lender, not the borrower, and the borrower remains liable for repayment regardless of the government-backed nature of the scheme.

A lender does not act unfairly by defaulting a loan when arrears remain outstanding after proper notice and communication of available support options.

A loan cannot be transferred (novated) to a new borrower unless that borrower would have been eligible for the original loan scheme.

A borrower remains responsible for ensuring loan repayments are made on time, and a lender may default an account following a formal arrears process when payments remain unpaid despite contact attempts.

A repayment holiday on a loan does not clear or pause existing arrears, which must be addressed separately through a formal repayment arrangement.

A consumer cannot be held liable for an unauthorized loan unless they applied for it themselves or authorized someone else to do so on their behalf.

A credit relationship is not rendered unfair under Section 140A of the Consumer Credit Act 1974 merely because a timeshare was marketed in breach of Regulation 14(3) of the Timeshare Regulations if the consumer received the contractual bene

A lender may lawfully report an account as defaulted to credit reference agencies when contractual obligations are not met, provided it has issued proper notice and exercised reasonable forbearance.

A credit relationship is only unfair under Section 140A of the Consumer Credit Act 1974 if the consumer has suffered actual financial loss as a result of the lender's conduct.

Lenders must show forbearance during financial difficulty, and defaults should not be registered while a customer is engaged in a viable arrangement to pay, even if formal notice is delayed.

A consumer credit provider must clearly communicate payment obligations, and a consumer who receives electronic notice of arrears and confirms understanding of separate payments has a reasonable opportunity to resolve the debt.

A credit provider must treat borrowers in financial difficulty with forbearance and due consideration, but is not obligated to accept goods returns made outside the supplier's contractual returns period.

Under Section 56 of the Consumer Credit Act 1974, a lender is responsible for the actions of a credit broker, but the consumer must have authorized the credit agreement for the lender to hold them responsible for the debt.

A lender is not liable for a loan taken out by a scam victim unless the lender knew or ought to have known about the coercion at the time of application.

A business director remains responsible for monitoring loan repayments and account status regardless of whether arrears notifications are received, and banks may rely on address information confirmed during KYC processes.

A lender may be liable under Section 140A of the Consumer Credit Act 1974 for unfair credit relationships if they participated in unfair conduct by a supplier, including during the sales process, but only where the unfairness is causally li

A credit relationship is not rendered unfair under Section 140A of the Consumer Credit Act 1974 merely because the underlying product was marketed improperly, if the consumer understood the borrowing terms and suffered no financial loss.

A Section 140A unfair credit relationship complaint about a credit agreement must be made within six years of when the credit relationship ended, or within three years of when the complainant became aware they had cause to complain.

A consumer who retains possession of a financed device and continues to use it cannot claim unjust enrichment by refusing to pay the outstanding balance solely due to unclear communication from the lender.

A lender may issue a default notice when a borrower fails to make contracted payments and does not meet the requirements of the default notice, even if the borrower claims financial difficulties.

A consumer cannot be fairly required to repay credit for goods where there is a genuine dispute about delivery, but on balance of probabilities the goods were likely delivered based on packaging evidence and security measures.

A credit relationship is not unfair under section 140A of the Consumer Credit Act 1974 merely because the creditor failed to disclose non-existent commission payments or because of alleged omissions by the supplier at point of sale.

A lender must carry out a reasonable and proportionate affordability assessment that is borrower-focused, considering whether repayments would be sustainable without causing difficulties or adverse consequences.

A lender may be party to an unfair credit relationship under Section 140A of the Consumer Credit Act 1974 if the credit relationship is rendered unfair by the conduct of the supplier or the terms of the agreement.

A lender is not responsible for ensuring a financed asset retains its value or for challenging a purchase price the consumer has agreed to pay.

A lender acts fairly when it conducts reasonable affordability checks proportionate to the loan value and finds sufficient disposable income after accounting for the borrower's existing commitments.