Not upheld: irresponsible lending - insufficient affordability checks complaint against Startline Motor Finance Limited

Decision detail

Summary

Mr F complained that Startline Motor Finance Limited irresponsibly provided a £10,948 car loan in 2022 with monthly repayments of around £275, arguing that Startline used incorrect information and performed insufficient checks. Startline had verified Mr F's declared income of around £1,900 per month and obtained credit reference agency data showing four previous defaults, three within the last 18 months. The ombudsman found that while Startline should have performed further validation checks given the recent defaults, a review of Mr F's bank statements for the three months preceding the loan confirmed that the affordability assessment figures were reasonable and that no current financial difficulty was evident. The complaint was not upheld as proportionate checks would likely have reached the same conclusion that the repayments were affordable.

The Ombudsman's reasoning

While Startline should have performed further checks given the historical defaults within 18 months, the ombudsman's review of Mr F's bank statements revealed that the figures used in Startline's affordability assessment were reasonably calculated and validated. The income was broadly as declared, committed expenditure was within estimated amounts, and there was no indication of current financial difficulty. Therefore, proportionate checks would likely have reached the same conclusion that repayments were affordable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website