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

Decision detail

Summary

Mr P complained that Oodle unfairly entered into a hire-purchase agreement for a car with unaffordable monthly payments of £354.14-£404.14. Oodle had verified Mr P's income via payslips and conducted credit searches revealing historic defaults from 2017-2018, concluding payments were affordable after estimating living expenses. The ombudsman found Oodle's checks were insufficient but determined that more thorough checks would not have prevented lending, as Mr P appeared to have sufficient funds when reasonable credit repayments and documented living expenses were deducted from his income. The ombudsman rejected Mr P's later disclosures about gambling and informal borrowing as information Oodle could not reasonably have discovered. The complaint was not upheld.

The Ombudsman's reasoning

Although Oodle's affordability checks were insufficient and should have included more detailed information about actual living expenses given the adverse credit history, the ombudsman concluded that proportionate checks would not have prevented lending. When reasonable repayments to existing credit commitments were added to documented living expenses and deducted from Mr P's income, he appeared to have sufficient funds to make the hire-purchase payments. The ombudsman noted that Mr P's subsequent disclosures about gambling and informal borrowing were not information Oodle could reasonably have been expected to discover without bank statements, and that Mr P's eagerness to acquire the car (evidenced by borrowing an additional £2,300.00 to exit his existing agreement) suggested he would not have voluntarily disclosed such information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website