Not upheld: irresponsible lending / unaffordable lending complaint against Black Horse Limited

Decision detail

Summary

Miss R complained that Black Horse unfairly entered into a hire-purchase agreement for a £29,950 vehicle with monthly payments of £531.56, claiming the payments were unaffordable as she was under financial pressure with limited disposable income. Black Horse had obtained Miss R's income and expenditure details, conducted credit reference agency searches showing no adverse information and low active debt, and calculated that she had sufficient disposable income after committed expenses. The ombudsman found Black Horse's checks were proportionate and that the objective evidence at the time did not suggest the agreement was unaffordable, and even enhanced checks would not have resulted in a different lending decision given Miss R's low committed expenditure while living with parents.

The Ombudsman's reasoning

The ombudsman found that Black Horse's proportionate checks were reasonable given the circumstances. The information obtained showed Miss R had sufficient disposable income after deducting committed expenses and existing credit commitments from her monthly income. While Miss R claimed to be under financial pressure, the objective evidence showed low active debt and sustainable credit usage. The ombudsman noted that even if Black Horse should have conducted further checks on living expenses, the bank statements would have shown similarly low committed expenditure, so a different lending decision would not have resulted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website