Upheld: irresponsible lending - inadequate affordability checks complaint against Startline Motor Finance Limited
Financial Ombudsman decision DRN-6318380 of 2026-04-27T00:00:00+00:00. irresponsible lending - inadequate affordability checks complaint against Startline Motor Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6318380 |
|---|---|
| Decision date | 2026-04-27T00:00:00+00:00 |
| Firm | Startline Motor Finance Limited |
| Product | hire purchase agreement |
| Claim type | irresponsible lending - inadequate affordability checks |
| Outcome | Upheld |
| Remedy | Startline Motor Finance Limited must: (A) Refund the £2,315 deposit with 8% simple interest per year from date of payment to settlement; (B) Calculate total monthly repayments made by Mr T, deduct £12,045 for fair usage of the car for approximately 33 months, and refund any overpayment with 8% simple interest per year from date of payment to settlement; (C) Refund any charges and fees paid due to repayment difficulties with 8% simple interest per year from date of payment to settlement; (D) Remove any adverse information recorded on Mr T's credit file relating to this agreement. |
Summary
Mr T complained that Startline Motor Finance Limited lent to him irresponsibly by approving a hire purchase agreement in October 2022 without conducting proportionate affordability checks. The agreement required monthly repayments of approximately £492 over 60 months, representing over 26% of Mr T's monthly income of £1,836. Mr T's credit file showed a long history of financial difficulties including multiple defaults and two outstanding CCJs, with one from only a year before the application. The ombudsman upheld the complaint, finding that proportionate checks would have revealed Mr T could not sustain the repayments without borrowing elsewhere, contrary to regulatory requirements. Startline was directed to refund the deposit, overpayments, and charges with interest, and to remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that Startline's checks were not proportionate to the circumstances. The credit check revealed a concerning history of financial difficulties including multiple defaults and two CCJs, with one from only a year before the application. Combined with the repayment amount representing over 26% of Mr T's monthly income and the 5-year term, more detailed checks were required. Analysis of bank statements showed that Mr T had no money remaining in his account within hours of being paid, and when family finances were examined, it was clear he could not sustain the repayments without borrowing elsewhere. The regulations required that the borrower be able to meet financial commitments without needing to borrow elsewhere, which was not the case here.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Startline Motor Finance Limited, all decisions | 495 | 50% |
Source
Read the original decision on the Financial Ombudsman Service website