Not upheld: irresponsible lending / unaffordable lending complaint against Oodle Financial Services Limited (trading as Oodle Car Finance)

Decision detail

Summary

Miss N complained that Oodle unfairly entered into a hire-purchase agreement for a car worth £6,879 without properly checking whether she could afford the monthly repayments of £168.07. Oodle had obtained Miss N's salary details and conducted credit searches showing no significant adverse credit history, then calculated that the payments were affordable based on her income minus estimated living expenses and existing credit commitments. Miss N later argued the payments were unaffordable and provided bank statement analysis showing insufficient funds for emergencies after accounting for family support payments. The ombudsman rejected the complaint, finding that Oodle's checks were proportionate given Miss N's good credit management and that even more thorough checks would likely not have prevented the lender from providing the finance.

The Ombudsman's reasoning

The ombudsman found that Oodle's checks were proportionate given that Miss N had no significant adverse credit history, was managing existing credit well, and the loan amount was not disproportionately high relative to her income. The ombudsman reasoned that it was reasonable for Oodle to rely on statistical estimates of living expenses rather than conducting more thorough checks, as nothing suggested Miss N fell outside the profile of an average borrower. The ombudsman also found that even if Oodle had conducted further checks and discovered Miss N's actual living expenses and family support payments, it would likely still have lent to her, as the information available at the time showed she had sufficient funds to make the repayments sustainably.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website