Not upheld: irresponsible lending / unaffordable lending complaint against CA Auto Finance UK Ltd (trading as FCA Automotive Services UK Ltd)

Decision detail

Summary

Mrs N complained that FCA Automotive unfairly entered into a hire-purchase agreement for a car without properly checking whether she could afford the £204.35 monthly repayments. FCA Automotive had obtained Mrs N's income details, conducted credit searches showing she managed existing credit well, and calculated that repayments were affordable after deducting existing obligations and estimated living expenses. Mrs N later provided bank statement analysis arguing she lacked sufficient funds for emergencies. The ombudsman rejected the complaint, finding the lender's checks were proportionate and that further investigation would unlikely have prevented the lending, given Mrs N's good credit history, substantial deposit, and reasonable bank balances during the period.

The Ombudsman's reasoning

The ombudsman found that FCA Automotive's checks were proportionate given that Mrs N had managed existing credit well, paid a substantial deposit (equivalent to 12 months of payments), and the calculated repayments appeared affordable based on her income and estimated expenses. The ombudsman was not persuaded that further checks would have revealed unaffordability, particularly given Mrs N's bank statements showed a reasonable credit balance and she would have been unlikely to voluntarily disclose affordability concerns when seeking the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website