Not upheld: irresponsible lending complaint against Blue Motor Finance Limited

Decision detail

Summary

Mr M complained that Blue Motor Finance irresponsibly lent to him through a hire purchase agreement in October 2019 for vehicle financing, without conducting adequate affordability checks despite his self-employment status and existing debts. Blue Motor Finance upheld the complaint, acknowledging that Mr M would likely have been declined under its current credit policy, and offered to write off interest and reduce the balance to £1,354.16 to reflect fair usage for 10 months less his single payment. Mr M rejected this offer, seeking full balance write-off, credit file amendment, and compensation. The ombudsman upheld Blue Motor Finance's redress as fair and reasonable, finding that while the lending was irresponsible, Mr M should pay for the vehicle's use he received, with interest appropriately written off and adverse credit information to be removed once the balance is cleared.

The Ombudsman's reasoning

The ombudsman accepted that the lending was irresponsible and the complaint was rightly upheld. However, the ombudsman found it fair that Mr M should pay for the use he had of the vehicle, as he benefitted from it for 10 months. The ombudsman rejected the argument that because the agreement shouldn't have been provided, no payment should be due. The ombudsman found the proposed balance of £1,354.16 (representing fair usage cost of £1,599.33 less the £245.17 paid) reasonable, and that interest write-off was appropriate. The ombudsman also found it reasonable that adverse credit information would be removed once the balance was cleared, rather than immediately.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website