Not upheld: irresponsible lending / unfair relationship under Consumer Credit Act 1974 s.140A complaint against Moneybarn No.1 Limited trading as Moneybarn

Decision detail

Summary

Mr P complained that Moneybarn lent to him irresponsibly when he entered into a Conditional Sale Agreement for a used vehicle in September 2018. He fell into arrears immediately and the vehicle was repossessed and sold in July 2019, leaving an outstanding balance. Mr P complained in July 2025, over six years later, arguing his credit file showed defaults and financial distress that should have prompted Moneybarn to decline the application. The ombudsman found the complaint could be considered under the unfair relationship provisions of the Consumer Credit Act 1974 and was therefore brought in time. However, the ombudsman concluded that Moneybarn had carried out reasonable checks, verified Mr P's stated income of £1,750 monthly via payslip, obtained a good credit score, and based on the available evidence of his expenditure, the agreement appeared affordable. The ombudsman found that Mr P's subsequent difficulties resulted from changes in circumstances (job loss and hospitalization) that occurred after the lending decision and could not have been foreseen. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the Consumer Credit Act 1974 (unfair relationship test) and found that Moneybarn carried out reasonable and proportionate checks given the circumstances. Although Moneybarn could not provide all documentation due to time elapsed, the evidence showed it obtained income verification via payslip and conducted a credit search. Based on the bank statements Mr P provided, his committed expenditure (rent of £900 and minimal debt collection payments) appeared manageable against his declared income of £1,750 monthly. The ombudsman rejected Mr P's arguments that the credit score was poor (finding it was 'good/very good' based on the score of 769) and that the absence of utility bills from statements indicated financial fragility (noting Mr P had not provided complete statements). The ombudsman found Mr P's subsequent difficulties stemmed from changes in circumstances (job loss, hospitalization) that occurred after the lending decision and could not have been reasonably foreseen. Moneybarn's conduct during the arrears period was reasonable, offering a repayment plan as expected.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website