Not upheld: Irresponsible lending complaint against Mallard Leasing Limited

Decision detail

Summary

Mr A complained that Mallard Finance irresponsibly granted him a hire purchase agreement for a £4,500 car with monthly repayments of £170.46 that he could not afford. Mr A subsequently struggled with repayments and the car was repossessed. Mallard argued it had completed adequate affordability checks including income verification, credit checks, and living expense estimation. The ombudsman found that Mallard's checks were proportionate to the circumstances and that based on Mr A's £2,500 monthly income, approximately £750 in existing commitments, and the relatively modest £170 monthly repayment, there was no evidence Mr A could not sustainably afford the agreement. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that Mallard was required to complete proportionate affordability checks taking into account factors such as total repayable, repayment size, cost and type of finance, and Mr A's specific circumstances. Based on Mr A's income of £2,500 per month, existing commitments of approximately £750 per month, and the relatively low Mallard repayment of £170 per month (which Mr A had successfully managed), the ombudsman concluded that Mallard's checks were proportionate and appropriate. The ombudsman found nothing in the evidence to indicate Mr A would likely struggle to afford the repayments sustainably, particularly given he was successfully managing similar or larger existing commitments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website