Not upheld: irresponsible lending / unfair credit relationship complaint against Black Horse Limited

Decision detail

Summary

Mr S complained that Black Horse unfairly entered into a hire-purchase agreement for a caravan in March 2019 when the finance was unaffordable and he had a poor credit rating and was in a debt repayment plan. Black Horse had obtained Mr S's declared income of £32,600 annually and expenditure of £1,800, conducted credit reference agency searches showing no significant adverse information, and verified that existing credit was reasonable and well-maintained. The ombudsman found that Black Horse's checks were proportionate and that the information obtained showed Mr S had sufficient funds to sustainably make the monthly repayments of £102.37, and that there was no persuasive evidence that further checks would have revealed the finance was unaffordable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied section 140A of the Consumer Credit Act 1974 to assess whether the lending relationship was unfair. The ombudsman found that Black Horse's checks were proportionate and that the information obtained showed Mr S had sufficient funds to make the repayments sustainably. The ombudsman noted that the absence of a DMP from credit checks and the substantial deposit paid by Mr S provided no obvious reason to suspect financial difficulty. The ombudsman concluded that even if Black Horse had conducted more thorough checks, there was no persuasive evidence this would have resulted in a different lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website