Not upheld: irresponsible lending - inadequate affordability checks complaint against Oodle Financial Services Limited trading as Oodle Car Finance

Decision detail

Summary

Mr B complained that Oodle irresponsibly lent to him for a car hire purchase agreement in August 2018 without conducting reasonable and proportionate affordability checks. Oodle had completed a credit check and obtained declared income but did not verify income or ask about essential expenditure, instead relying on ONS data. The ombudsman found the checks were not proportionate but concluded that proportionate checks would have shown the lending was affordable, as Mr B's bank statements demonstrated sufficient income to cover existing commitments, essential expenses, and new monthly repayments. The complaint was not upheld.

The Ombudsman's reasoning

Although Oodle's checks were not proportionate as they did not verify income or ask about essential spend, the ombudsman considered what proportionate checks would likely have revealed. Based on Mr B's bank statements and financial information, proportionate checks would have shown sufficient income to cover existing commitments, essential expenditure, and new monthly repayments with remaining income for other foreseeable expenditure. The credit search showed no indicators of unsustainable borrowing. Overdraft usage alone is not a reason to refuse lending where appropriate checks show affordability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website