National Westminster Bank Public Limited Company · DRN-6252897

The complaint Mr G complains that National Westminster Bank Public Limited Company (NatWest) lent irresponsibly when it approved two credit card applications within three months. What happened The background to this complaint and my initial conclusions were set out in a provisional decision. I said: Mr G applied for a NatWest credit card in January 2025 (card 1). In his application, Mr G said he was employed with an net monthly income of £3,393. NatWest says it verified Mr G’s income level via a service provided by a credit reference agency. A credit search found Mr G had unsecured debts totalling £29,400 with loan payments of £553 and credit card payments of £437 a month. No adverse credit or recent missed payments were noted. NatWest completed an affordability assessment using Mr G’s income of £3,393 a month and made deductions of £541 for his housing costs, £988 for general living expenses, £75 as a buffer, £553 for loans and £437 for credit card payments. NatWest calculated Mr G had a disposable income of £799 a month. NatWest approved Mr G’s application and issued a credit card with a limit of £10,000. The credit card came with a promotional interest rate of 0% for 12 months. Mr G transferred various credit card balances to card 1 taking advantage of the promotional interest rate. There was also a small amount of retail spending. In March 2025 Mr G applied for a second NatWest credit card (card 2). In this application, a net monthly income of £3,200 was used. A new credit search found unsecured debts totalling £28,700 with loan payments of £554 and credit card payments of £436 a month. No new adverse credit or recent missed payments were recorded. An affordability assessment was completed that used a monthly income of £3,200 and made deductions if £415 for Mr G’s housing costs, £789 for Mr G’s general living expenses, £554 for loan payments and £436 for credit card payments each month. NatWest says Mr G had a disposable income of £1,006 after his existing outgoings were met. NatWest approved the application for card 2 and issued a credit card with a limit of £10,000. Again, the credit card came with a 12 month 0% interest promotion for balance transfers. Mr G went on to complete various balance transfers to card 2. More recently, Mr G complained that NatWest lent irresponsibly and it issued a final response. NatWest said it had carried out the relevant lending checks before approving both applications and didn’t agree it lent irresponsibly. An investigator at this service looked at Mr G’s complaint. They thought the decision to approve card 1 was reasonable based on the information NatWest obtained. The investigator wasn’t persuaded NatWest completed proportionate checks for card 2 and

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looked at Mr G’s bank statements for the preceding months. They thought Mr G’s bank statements showed card 2 was affordable and didn’t uphold Mr G’s complaint. Mr G asked to appeal, so his complaint has been passed to me to make a decision. What I’ve provisionally 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. Before agreeing to lend, the rules say NatWest had to complete reasonable and proportionate checks to ensure Mr G could afford to repay the debt in a sustainable way. These affordability checks needed to be focused on the borrower’s circumstances. The nature of what’s considered reasonable and proportionate will vary depending on various factors like: - The amount of credit; - The total sum repayable and the size of regular repayments; - The duration of the agreement; - The costs of the credit; and - The consumer’s individual circumstances. That means there’s no set list of checks a lender must complete. But lenders are required to consider the above points when deciding what’s reasonable and proportionate. Lenders may choose to verify a borrower’s income or obtain a more detailed picture of their circumstances by reviewing bank statements for example. More information about how we consider irresponsible lending complaints can be found on our website. I’ll start by looking at Mr G’s application for card 1. I can see Mr G confirmed he was working full time with a net monthly income of £3,393. NatWest uses a service from a credit reference agency that looks at current account turnover. The response verified the income level Mr G provided. In the circumstances of the application for card 1, I’m satisfied it was reasonable for NatWest to use that figure in the affordability assessment. Mr G’s credit file didn’t show any recent adverse credit or missed payments. Mr G’s unsecured debts were noted and the monthly repayments were factored into the lending assessment NatWest completed. I note Mr G already owed a substantial amount at around £29,400. But Mr G’s accounts were all up to date at this point and there was no obvious signs he was struggling. The affordability assessment used estimates for Mr G’s rent and general living expenses. I note the rent estimate was a little higher than the figure Mr G gave in his application. The outcome of the affordability assessment reached the view Mr G had around £799 a month remaining as a disposable income. In my view, that was a reasonable conclusion for NatWest to reach in terms of Mr G’s application for card 1. And I’m satisfied the information NatWest obtained reasonably showed Mr G was able to sustainably make repayments to a new credit card with a limit of £10,000. I’m sorry to disappoint Mr G but I haven’t been persuaded NatWest lent irresponsibly when it approved card 1. I’ve reached a different view to the investigator concerning card 2. I think Mr G makes a very reasonable point when he says NatWest extended a total of £20,000 in new credit within a three month period. I also note that the estimates used by NatWest for Mr G’s rent and general living expenses were somewhat lower than used in the affordability assessment

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completed three months earlier for card 1. It’s unlikely Mr G’s outgoings will have dropped between the applications he made which somewhat calls into question the claim he had over £1,000 as a disposable income. In my view, before extending a further £10,000 in new credit to Mr G, it would’ve been proportionate for NatWest to have completed a more detailed approach to his application. I think proportionate checks would’ve sought to clarify Mr G’s circumstances by getting a clearer picture of his income and outgoings. To that end, I’ve reviewed Mr G’s bank statements for the three months before his application for card 1 was made. I found Mr G was earning an average of £2,199 a month. Mr G also received contributions towards the household bills that averaged £283 a month. For the purposes of this assessment, I’ve used a monthly income of £2,482. I found Mr G was making monthly payments of £650 for bills to another account. Mr G also had a substantial number of direct debits for unsecured debts and other services. I reached a monthly average outgoings figure of £2,664 for items like bills, utilities, transport, unsecured debts, communications, insurance and unsecured debts. That’s around £180 more than Mr G’s regular income. I can see there are various transfers into the account from other sources. But they weren’t regular nor is there any evidence to show they formed part of Mr G’s income. Arguably more significant is that Mr G’s bank statements show he was consistently taking on new borrowing and moving debts around. I found Mr G was reliant on credit and was already overcommitted. In December 2024, Mr G borrowed £3,000 from another business and consolidated debts. In January 2025, Mr G borrowed £2,000 and repaid credit card debts. But in February 2025 Mr G took cash advances from two of his credit cards, totalling £3,600, again using some of those funds to repay other debts. In my view, Mr G’s bank statements show he was regularly borrowing substantial sums and using that to service his other debts. The way Mr G was moving funds around and borrowing wouldn’t have been sustainable in the long term. I think a review of Mr G’s bank statements would’ve quickly shown NatWest Mr G wasn’t borrowing in a sustainable way and unable to consistently afford a new credit card with a limit of £10,000. I think additional checks would most likely have led NatWest to decline the application for card 2. As I haven’t been persuaded NatWest lent responsibly when it approved Mr G’s application for card 2, I intend to uphold this part of his complaint and direct NatWest to refund all interest, fees and charges applied and work with him to find an affordable repayment solution. I’ve considered whether the business acted unfairly or unreasonably in any other way including whether the relationship might have been unfair under Section 140A of the Consumer Credit Act 1974. However, I’m satisfied the redress I have directed below results in fair compensation for Mr G in the circumstances of his complaint. I’m satisfied, based on what I’ve seen, that no additional award would be appropriate in this case. I invited both parties to respond with any additional comments or information they wanted me to consider before I made my final decision. Mr G responded to say he was pleased his complaint about card 2 had been upheld and wanted to accept the settlement. But Mr G also said he believes the same outcome should be applied to card 1. Mr G added any repayment plans he agrees with NatWest are likely to be similar for both accounts and points out they will be operating on different terms. Mr G also said another lender, B, had issued a credit card with a £10,000 limit around the same time and agreed to refund the interest, fees and charges after he complained. NatWest responded to confirm it was willing to accept.

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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. I understand Mr G feels both credit cards should be treated in the same way. But my provisional decision has already explained why I didn’t uphold Mr G’s complaint about card 1. I felt the lending checks NatWest completed were proportionate to the £10,000 limit approved for card 1. I also explained why I felt the information NatWest obtained indicated repayments to card 1 were likely sustainable. I still think that’s a fair outcome for the card 1 part of Mr G’s complaint. Mr G’s explained any repayment plan he agrees for either card will likely be the same. I leave it to Mr G to discuss his credit cards and any repayment with NatWest. As noted below, the settlement requires NatWest to refund any interest, fees and charges applied to card 2. Also, once card 2’s balance is repaid, the settlement requires NatWest to remove any adverse information recorded about it from Mr G’s credit file. In addition, NatWest will need to discuss card 2’s repayments with Mr G to agree an affordable repayment plan. Mr G can also contact NatWest to discuss card 1 and any difficulties he may be experiencing making repayments. Whilst not subject to a settlement in this case, NatWest is obliged to treat Mr G fairly and take his circumstances into account. I understand B upheld a similar complaint Mr G made about a credit card with a limit of £10,000. But we look at complaints on an individual basis. And I’ve set out above and in my provisional decision why I’m upholding Mr G’s complaint about card 2. I’m satisfied the decision sets out how I’ve reached my conclusions. I’ve read everything Mr G has said in both brining his complaint and in response to my provisional decision. Having done so, I haven’t been persuaded to uphold Mr G’s complaint about card 1. I still think Mr G’s complaint about card 2 should be upheld, for the same reasons. My final decision My decision is that I uphold Mr G’s complaint and direct National Westminster Bank Public Limited Company to settle as follows: • Rework the account removing all interest, fees, charges and insurances (not already refunded) that have been applied to card 2. • If the rework results in a credit balance for card 2, this should be refunded to Mr G along with 8% simple interest per year* calculated from the date of each overpayment to the date of settlement. NatWest should also remove all adverse information regarding card 2 from Mr G’s credit file. • Or, if after the rework there is still an outstanding balance for card 2, NatWest should arrange an affordable repayment plan with Mr G for the remaining amount. Once Mr G has cleared the balance for card 2, any adverse information in relation to the account should be removed from their credit file.

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*HM Revenue & Customs requires NatWest to deduct tax from any award of interest. It must give Mr G a certificate showing how much tax has been taken off if he asks for one. If it intends to apply the refund to reduce an outstanding balance, it must do so after deducting the tax. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr G to accept or reject my decision before 24 April 2026. Marco Manente Ombudsman

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