The Financial Ombudsman Service has made its first determination that deals with the responsible lending rules and has demonstrated it is prepared to take a wide-ranging approach the issue.Although the responsible lending provisions of the National Consumer Credit Protection Act have been in force since July 2010, FOS only handled its first dispute dealing with the issue this year.FOS gave a run-down of the matter in the latest issue of its newsletter, the Circular.Under the responsible lending rules, a financial services provider must do three things to be satisfied that a credit contract is "not unsuitable" for a borrower. It must: make reasonable inquiries about the consumer's requirements and objectives; make reasonable inquiries about the consumer's financial situation; and take reasonable steps to verify the consumer's financial situation.FOS found fault with the procedures of the lender in the dispute. The lender, a provider of consumer leases for household goods, was only able to supply "very limited" supporting information to show that it had made adequate inquiries, and there were also some obvious discrepancies in the application documents that should have been corrected, said FOS.The lender did not have any written internal procedures for assessing the applicant's capacity to repay either.FOS said it took some other factors into account when it considered whether the lender had met its obligations. These included the fact that the applicant was vulnerable, because she had limited education, and did not understand the loan document.Also, the lender's advertising material was misleading, and the cost of the transaction was very high.FOS found that if the lender had assessed the application properly it would have known that the applicant could not afford the repayments.FOS was also critical of the fact that the lender required the applicant to sign a direct debt authorisation, which forced her to prioritise the lease payments over her living expenses.