Not upheld: irresponsible lending / unaffordable finance complaint against Moneybarn No.1 Limited

Decision detail

Summary

Mr H complained that Moneybarn unfairly provided him with a conditional sale agreement for a car without conducting proper affordability checks, resulting in unaffordable repayments of £470.92 monthly. Moneybarn had verified his income and conducted credit searches revealing a defaulted account and completed IVA, but relied on estimated living costs. The ombudsman found the initial checks insufficient but concluded that obtaining actual committed living expenses would have shown affordability. Although Mr H's bank statements later revealed significant gambling, the ombudsman found proportionate checks would not have extended to discovering this and rejected using it as grounds for upholding the complaint.

The Ombudsman's reasoning

The ombudsman acknowledged that Moneybarn's initial checks were insufficient given the adverse credit information, particularly relying on estimated living costs rather than actual figures. However, the ombudsman concluded that had Moneybarn obtained further information about Mr H's actual committed living expenses (through bills rather than bank statements), it would likely have found the repayments affordable. The ombudsman rejected using Mr H's gambling activity discovered in bank statements as a basis for upholding the complaint, finding that proportionate checks would not have extended to that level of granularity and Mr H had the most knowledge of his true situation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website