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Issue 18 - August 2014

The FOS Approach to Responsible Lending


We publish the FOS Approach to help make it as easy as possible for everyone to understand how we consider disputes about particular issues. This includes the different elements we will consider and the relevant Codes, legal principles, obligations and industry best practice that we will apply. We want to share this knowledge so that everyone can learn from the thousands of disputes we see each year.

The latest FOS Approach documents form a series that explains how we deal with responsible lending disputes. When a consumer (an individual or small business owner) cannot make their loan repayments, they sometimes say that their financial services provider (FSP) should not have given them the loan because they never had the ability to repay the loan. The consumer may lodge a dispute with FOS for compensation for the loss they have suffered as a result of the FSP providing them the loan. We call this a responsible lending dispute. When we consider responsible lending disputes, we decide whether it was appropriate for the FSP to lend the money.

The titles in the responsible lending series are:

  • Common issues
  • How we work out a consumer’s loss
  • How we approach responsible lending disputes taking into consideration legal principles, industry codes and good industry practice
  • Low doc loans


You can read our whole Approach series on responsible lending here.

Visit to see all the available FOS Approach documents.