I was denied a loan by an automated system. Can I challenge the decision?

What the Law Says

UK law gives you specific rights when a lender uses automated decision-making — such as AI or algorithmic scoring — to deny your loan application without meaningful human involvement.

Under Article 22 of the UK General Data Protection Regulation (UK GDPR), you have the right not to be subject to a decision based solely on automated processing — including profiling — that produces legal or similarly significant effects on you. A loan denial is considered a 'significant effect'.

The Data Protection Act 2018 supports this right. Section 49 states that where a decision is made solely by automated means, you must be informed of your right to request human intervention, to express your point of view, and to contest the decision.

Lenders must also provide meaningful information about the logic involved, as well as the significance and envisaged consequences of the processing — but they do not need to disclose proprietary algorithms or trade secrets.

Statutory Text

The data subject shall have the right not to be subject to a decision based solely on automated processing, including profiling, which produces legal effects concerning him or her or similarly significantly affects him or her.

— UK GDPR, Art. 22(1) — Automated individual decision-making, including profiling

Statutory Text

Where a decision is taken solely by automated means, the controller must inform the data subject of their right to obtain human intervention, to express their point of view, and to contest the decision.

— Data Protection Act 2018, s. 49 — Rights in relation to automated decision-making

What to Do

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