Not upheld: irresponsible lending and obstruction of right to withdraw complaint against Toyota Financial Services (UK) PLC trading as Lexus Financial Services

Decision detail

Summary

Mr S complained that Lexus irresponsibly provided him with a hire purchase agreement for £17,503.02 without conducting adequate affordability checks and that he was prevented from exercising his 14-day right to cancel. The ombudsman found that while Lexus' initial checks could have been more detailed, proportionate checks would have shown the lending was affordable given Mr S' income of approximately £4,237.75 per month against committed expenditure of £1,622 and the £327 monthly repayment. The ombudsman also found insufficient evidence that Mr S was prevented from cancelling the agreement. The complaint was not upheld.

The Ombudsman's reasoning

While Lexus' initial affordability checks could have been more thorough given Mr S' complex financial situation with high revolving credit and variable income, proportionate checks would likely have shown the lending was affordable. The ombudsman calculated that Mr S had average monthly income of £4,237.75 and committed expenditure of £1,622, leaving sufficient funds for the £327 monthly repayment. Even accounting for variable income and discretionary spending, Mr S would have had enough to repay. The fact that Mr S has repaid without problems supports the conclusion that the lending was sustainable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website