Not upheld: irresponsible lending / unaffordable lending complaint against Blue Motor Finance Limited

Decision detail

Summary

Mr A complained that Blue Motor Finance Limited unfairly lent to him by entering into a hire-purchase agreement for a used car with unaffordable monthly payments of £157.09. BMF had obtained Mr A's declared annual income of £14,400, cross-checked it against bank deposits, conducted credit searches showing no significant adverse history, and assessed affordability based on his income minus existing commitments and living expenses. The ombudsman found that BMF's checks were proportionate and the information suggested the repayments were affordable. Although Mr A later claimed the payments were unaffordable, the ombudsman found his later submissions less reliable as they were made in support of a compensation claim. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that BMF's checks were proportionate given the circumstances. BMF obtained Mr A's declared income, cross-checked it against actual bank deposits, reviewed his credit history, and considered his existing indebtedness and deposit. When reasonable living expenses were deducted from his income along with existing commitments, the repayments appeared affordable. The ombudsman noted that even if BMF should have done more, further investigation into living expenses would likely have shown Mr A could afford the payments. The ombudsman also considered that Mr A's later claims of unaffordability were made in support of a compensation claim and were less reliable than representations made at the time of application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website