Not upheld: irresponsible lending - inadequate affordability checks complaint against Oodle Financial Services Limited

Decision detail

Summary

Mr M complained that Oodle Financial Services Limited irresponsibly lent to him by failing to conduct sufficient affordability checks before providing a hire purchase agreement for a used car in November 2019. The agreement was for £13,460 financed with monthly repayments of approximately £484-£534. Oodle did not verify Mr M's self-employed income or obtain actual details of his living costs, instead relying on statistical data. The ombudsman found that while Oodle's checks were not proportionate, analysis of Mr M's bank statements revealed his actual income was approximately £4,500 per month and his expenditure, though substantial, would not have rendered the agreement unaffordable. The complaint was not upheld as the ombudsman concluded Oodle would have approved the agreement had it conducted proper checks.

The Ombudsman's reasoning

The ombudsman acknowledged that Oodle's checks were not proportionate, particularly the failure to verify self-employed income and reliance on statistical data for living costs rather than actual information. However, the ombudsman concluded that had Oodle conducted proportionate checks using the bank statements as evidence, it would have discovered that Mr M's actual income was higher than declared (approximately £4,500 per month) and his expenditure, while substantial, would not have made the agreement unaffordable. The ombudsman noted that Mr M was replacing an existing HP agreement with a lower combined cost and that the bank statements showed no signs of financial difficulties such as returned payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website