Partially upheld: Irresponsible lending complaint against Black Horse Limited

Decision detail

Summary

Mrs H complained that Black Horse irresponsibly lent to her through a hire purchase agreement in May 2022 for a £12,250 car with £262.53 monthly repayments, arguing the firm failed to conduct reasonable affordability checks given she had only been employed for 6 days. The ombudsman found Black Horse's checks were not proportionate but concluded that adequate checks would have shown the lending was affordable based on her income and expenditure. However, the ombudsman upheld a secondary complaint that Black Horse incorrectly reported a default on her credit file after she repaid in full in August 2025 and failed to promptly correct it, causing her to be declined for credit twice. Black Horse was ordered to pay £250 compensation for this credit file misreporting.

The Ombudsman's reasoning

Although Black Horse's affordability checks were not reasonable and proportionate, the ombudsman concluded that proportionate checks would likely have shown the lending was sustainable and affordable. Mrs H had sufficient income to meet existing commitments, essential expenditure, and new repayments with disposable income remaining. Her overdraft usage alone was not sufficient reason to refuse lending as she was managing her credit and had not missed payments. However, Black Horse was found to have caused distress and inconvenience by incorrectly reporting a default on her credit file after full repayment and failing to promptly correct it.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website