Partially upheld: Irresponsible lending complaint against Carnegie Consumer Finance Limited
Financial Ombudsman decision DRN-3830247 of 2023-02-06T00:00:00+00:00. Irresponsible lending complaint against Carnegie Consumer Finance Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-3830247 |
|---|---|
| Decision date | 2023-02-06T00:00:00+00:00 |
| Firm | Carnegie Consumer Finance Limited |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Partially upheld |
| Remedy | Carnegie Consumer Finance Limited should not seek repayment of the remaining balance of £855 from Mr P, effective from 19 February 2021. The loan should be treated as settled as of 1 March 2021. Any payments made by Mr P after 1 March 2021 should be refunded and his credit file updated accordingly. |
Summary
Mr P financed a £7,145 plumbing course through Carnegie Consumer Finance Limited with a loan repayable over 43 months. He subsequently complained that the course provider misrepresented the course's compatibility with full-time work and that the course delivery was poor, particularly when disrupted by the Covid-19 pandemic. Additionally, Mr P complained that Carnegie failed to assist him when he requested payment suspension after losing his job during the pandemic. The ombudsman rejected the misrepresentation claims, finding Mr P had sufficient written information and that opinions about course compatibility were not actionable. However, the ombudsman found Carnegie's handling of Mr P's financial hardship request deficient, as it failed to make further contact attempts after Mr P's initial unsuccessful reply. The ombudsman upheld Carnegie's offer to forgo the remaining £855 loan balance as fair compensation for the service failures.
The Ombudsman's reasoning
The ombudsman found that while Mr P may have had concerns about course suitability, he was provided with sufficient written information to make an informed decision and the onus was on him to satisfy himself about compatibility with his circumstances. Statements about course compatibility with full-time work were opinions rather than actionable misrepresentations. However, Carnegie failed to adequately engage with Mr P's concerns and, critically, failed to provide appropriate support when Mr P requested assistance during financial hardship caused by pandemic job loss. Although Carnegie could have offered a three-month payment holiday, the ombudsman found that Carnegie's failure to make further contact attempts after Mr P's initial unsuccessful reply constituted poor service. The ombudsman considered that Carnegie's offer to forgo the remaining £855 balance was fair compensation for the avoidable distress and difficulty caused by inadequate handling of the financial hardship request.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Carnegie Consumer Finance Limited, all decisions | 32 | 3% |
| Irresponsible lending, all decisions | 29,406 | 38% |
| Personal loan, all decisions | 22,762 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website