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

Decision detail

Summary

Mr J complained that Moneybarn irresponsibly provided him with a £8,755 car finance agreement in August 2023 with a 60-month term at £224.40 monthly. Moneybarn's checks showed only £45 monthly disposable income after essential expenses and loan repayments. The ombudsman found Moneybarn's initial checks were not reasonable and proportionate, but upon reviewing open-banking data, determined that proportionate checks would have shown Mr J's actual expenditure was substantially lower than Moneybarn's allowances. Based on Mr J's actual circumstances, there was no evidence he would be unable to sustainably repay, so the complaint was not upheld.

The Ombudsman's reasoning

While Moneybarn's initial checks were not reasonable and proportionate given the £45 monthly disposable income, the ombudsman reviewed open-banking data that would likely have been found through proportionate verification. This showed Mr J's actual expenditure was substantially lower than Moneybarn's allowances. Based on Mr J's actual circumstances, there was nothing to suggest he would be unable to sustainably repay the loan. Therefore, proportionate checks would likely have led to the same lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website