Not upheld: irresponsible lending - inadequate affordability checks complaint against BMW Financial Services (GB) Limited

Decision detail

Summary

Mr B complained that BMW lent to him irresponsibly when providing a £35,865 car finance agreement with £523.53 monthly repayments in May 2025. Mr B subsequently fell into arrears and claimed he could not afford the repayments, arguing BMW should have conducted more thorough checks. BMW defended their decision, stating their automated affordability checks showed the loan was affordable based on available information. The ombudsman found that while BMW should have verified Mr B's income given the loan size, proportionate checks would have revealed sufficient disposable income (approximately £1,812 monthly) to sustainably afford the repayments. With no adverse credit history or signs of vulnerability apparent at the time of lending, the complaint was not upheld, though BMW was reminded of its obligations to treat Mr B fairly given his current difficulties.

The Ombudsman's reasoning

While BMW failed to verify Mr B's income, which was a shortcoming in their proportionate checks, the ombudsman concluded that proper checks would have reached the same lending decision. Based on Mr B's actual income of approximately £2,479 monthly and total borrowing commitments of £667 monthly, he had sufficient funds (approximately £1,812) remaining for household expenses and sustainable repayment. Mr B's credit file and management of existing accounts showed no signs of financial difficulty at the time of lending. The ombudsman found no evidence that BMW should have been aware of Mr B's vulnerability or mental health concerns at the point of lending, as these were not disclosed until after the agreement commenced.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website