Not upheld: Irresponsible lending complaint against Specialist Motor Finance Limited

Decision detail

Summary

Mr N complained that SMF irresponsibly provided an unaffordable hire purchase agreement. SMF had conducted affordability checks including income validation, ONS and CRA data analysis, and credit checks, which showed Mr N had modest credit levels and good recent credit management. Although a historic default and overdraft use were identified, the ombudsman found these did not warrant more detailed checks. Mr N maintained contractual payments and only raised affordability concerns when filing his complaint. The ombudsman concluded SMF made a fair lending decision and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that SMF's affordability checks were reasonable and proportionate to the terms of credit and Mr N's circumstances. The regulatory rules do not prescriptively require bank statement review, and the information SMF obtained did not suggest more detailed checks were necessary. Awareness of overdraft use alone is not grounds for more detailed checks or lending refusal. Mr N's subsequent borrowing from his wife to cover a shortfall was his choice rather than evidence of unaffordability at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website