Upheld: irresponsible lending - failure to assess sustainable repayment ability complaint against Black Horse Limited
Financial Ombudsman decision DRN-6256629 of 2026-04-29T00:00:00+00:00. irresponsible lending - failure to assess sustainable repayment ability complaint against Black Horse Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6256629 |
|---|---|
| Decision date | 2026-04-29T00:00:00+00:00 |
| Firm | Black Horse Limited |
| Product | car finance (hire purchase agreement) |
| Claim type | irresponsible lending - failure to assess sustainable repayment ability |
| Outcome | Upheld |
| Remedy | Black Horse Limited must: (1) Refund to Miss E any payments made towards the agreement in excess of £16,744 (the combined cash price of car and additional products), with 8% simple yearly interest from the date of each overpayment to the date of settlement; (2) Remove any adverse information recorded on Miss E's credit file regarding the agreement. |
Summary
Miss E complained that Black Horse Limited irresponsibly lent to her when it entered into a hire purchase agreement for a car in May 2013. Miss E was a self-employed contractor going through a divorce, with multiple mortgage commitments and recently entered into rented accommodation. Black Horse failed to adequately assess her financial circumstances and ability to sustainably meet the monthly repayments of £342.60. The ombudsman upheld the complaint, finding that had Black Horse made reasonable enquiries about Miss E's essential expenditure, it would have discovered a significant deficit between her income and committed expenses, making the lending unsustainable. Black Horse was ordered to refund overpayments with interest and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman applied OFT guidance requiring lenders to take reasonable steps to assess whether borrowers could meet repayments in a sustainable manner without undue difficulty or financial hardship. Black Horse failed to obtain sufficient information about Miss E's circumstances, particularly her living arrangements and multiple mortgage commitments. By reviewing available bank statements and considering what a reasonable assessment would have shown, the ombudsman concluded that Miss E had a significant deficit between income and committed expenditure, including rental costs, multiple mortgage payments, and other essential expenses. The ombudsman found it more likely than not that Black Horse would have discovered this deficit had it made reasonable enquiries, and that Miss E was borrowing from family members to meet obligations, which was unsustainable. Therefore, Black Horse should not have lent to Miss E.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Black Horse Limited, all decisions | 1,452 | 27% |
Source
Read the original decision on the Financial Ombudsman Service website