Not upheld: Irresponsible lending complaint against Billing Finance Limited

Decision detail

Summary

Mr M complained about a hire purchase agreement with Billing Finance for a car supplied in May 2023, alleging excessive interest, undisclosed commission, inflated car price, and that the monthly payment of £330.49 became burdensome. Billing Finance did not uphold the complaint, and Mr M referred it to the FOS. The ombudsman found that Billing Finance verified Mr M's income at £3,200 monthly, completed appropriate affordability checks showing £1,564 monthly disposable income after deductions, and made a fair lending decision. The ombudsman rejected arguments for enhanced checks and found no evidence of irresponsible lending or unfair relationship under section 140A, noting Mr M had agreed to the terms and could have withdrawn within 14 days. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Billing Finance made reasonable and proportionate checks appropriate to the credit applied for. The verified income of £3,200 monthly, minus estimated living costs of £1,128, existing credit commitments of £178, and the hire purchase payment of £330, left Mr M with disposable income of £1,564 monthly, making the payment sustainably affordable at the time of lending. The ombudsman rejected arguments that enhanced checks were required based on car price or APR alone. Mr M had signed the agreement with full knowledge of terms and had a 14-day withdrawal right which he did not exercise. The ombudsman found no evidence of irresponsible lending or unfair relationship under section 140A.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website