Upheld: irresponsible lending / unaffordable credit / inadequate affordability checks complaint against MotoNovo Finance Limited
Financial Ombudsman decision DRN-6246883 of 2026-04-23T00:00:00+00:00. irresponsible lending / unaffordable credit / inadequate affordability checks complaint against MotoNovo Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6246883 |
|---|---|
| Decision date | 2026-04-23T00:00:00+00:00 |
| Firm | MotoNovo Finance Limited |
| Product | motor finance / vehicle loan |
| Claim type | irresponsible lending / unaffordable credit / inadequate affordability checks |
| Outcome | Upheld |
| Remedy | Mr S should retain the van. MotoNovo must refund any payments made in excess of £9,600 (the original cash price), add simple interest at 8% per annum from the date of each overpayment to the date of settlement, and remove any relevant adverse information from Mr S's credit file. MotoNovo must deduct tax as required by HMRC and provide a certificate if requested. |
Summary
Mr S complained that MotoNovo Finance Limited lent to him irresponsibly when providing a 61-month motor finance agreement in April 2020 for £11,434.80. MotoNovo relied on Mr S's unverified declaration of £37,500 annual income and a credit reference agency search showing good payment history, but gathered no information about his essential expenditure. The ombudsman found that reasonable and proportionate checks would have required income verification and expenditure assessment, and that Open Banking data available to the FOS showed Mr S's income varied considerably and fell short of his essential outgoings. The complaint was upheld, and MotoNovo was ordered to refund overpayments above the £9,600 original cash price with interest, allow Mr S to retain the van, and remove adverse credit file information.
The Ombudsman's reasoning
MotoNovo failed to conduct reasonable and proportionate affordability checks as required by FCA CONC rules. While they verified credit history through CRA searches, they did not verify Mr S's declared income or assess his non-discretionary expenditure. Given the amount of credit, uncertain employment status, and lack of income verification, such checks were necessary and proportionate. Open Banking data available to the ombudsman showed that Mr S's income varied considerably and fell short of his essential outgoings in April 2020, demonstrating the lending was unaffordable. The customer's signed declaration and subsequent payment history do not excuse the failure to conduct proper checks at the point of lending.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| MotoNovo Finance Limited, all decisions | 559 | 45% |
Source
Read the original decision on the Financial Ombudsman Service website