Lenders won't be able to defend complaints from borrowers that they didn't meet their responsible lending obligations if they have relied on a standard credit checklist or merely accepted a declaration from a borrower with no supporting financial information.The Credit Ombudsman Service issued a position statement yesterday explaining how it plans to deal with a complaint that a consumer was sold an unsuitable credit product.It made clear that checklists are insufficient and that self-certification must now include the borrower's financial details.The position statement says: "An application for credit may satisfy a credit provider's own lending policies but that does not mean the credit provider has satisfied its responsible lending obligations."COSL also warned lenders that the concept of "scalable" inquiries, where the level of inquiry depends on the type of credit being sought, was not straightforward.The National Consumer Credit Protection Act has imposed responsible lending obligations on lenders and their credit representatives for the first time. The aim is to ensure that a consumer does not end up with a credit contract that is unsuitable. So, the lender or representative must make reasonable inquiries about the consumer's requirements and objectives, and his or her financial situation. The lender must take reasonable steps to verify the consumer's financial situation and must make an assessment about whether a credit contract is "not unsuitable".An unsuitable credit contract is one that does not meet the borrower's needs and objectives, or is one the consumer would struggle to repay.Credit checklists, used widely in the industry for personal loan and credit card applications, are not enough. Each customer's application must be considered "separately and independently".It is no longer possible to have a self-certified loan where the consumer does not provide the credit provider with any financial information. A credit provider will not meet its responsible lending obligations if it does no more than obtain a declaration from the borrower that the borrower believes he or she can afford the loan repayments.The Australian Securities and Investments Commission has told lenders that the requirement to verify information is "scalable". For a small personal loan the credit provider would need to make less detailed inquiries than for a mortgage.COSL said there was some misunderstanding about this concept. "Even a small loan can cause financial difficulties for a consumer on a low income. In such circumstances the credit provider may need to make more inquiries. "More extensive inquiries would be needed in cases where the credit contract is complex, the consumer has limited capacity to understand the contract and where the potential negative impact of an unsuitable contract would be serious."