Not upheld: Irresponsible lending complaint against Marsh FM LLP

Decision detail

Summary

Mrs W complained that Marsh irresponsibly granted her a hire purchase agreement for a vehicle with monthly payments of £303.57 that she could not afford. Marsh had conducted a credit check and verified income through payslips but did not examine Mrs W's detailed expenditure. The ombudsman found that while Marsh's checks were not proportionate and should have included verification of expenditure, analysis of Mrs W's bank statements showed she had approximately £555 in disposable income monthly after essential costs and the new finance payment, indicating the agreement was affordable. The complaint was not upheld as the ombudsman was satisfied that proper checks would have revealed the agreement was sustainable for Mrs W.

The Ombudsman's reasoning

The ombudsman found that while Marsh failed to conduct proportionate affordability checks by not verifying Mrs W's expenditure, this did not automatically mean the lending decision was unfair. Using Mrs W's bank statements as evidence of what would likely have been disclosed through proper checks, the ombudsman calculated that Mrs W had approximately £555 in disposable income monthly after all essential commitments and the new finance payment. This was sufficient to cover the agreement sustainably with room for emergencies. The ombudsman distinguished between essential regular living costs and discretionary spending, noting that non-essential expenditure could be adjusted following approval of new finance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website