Not upheld: irresponsible lending - inadequate affordability checks complaint against 247 Money Group Limited

Decision detail

Summary

Mr M complained that 247 Money unfairly lent to him by entering into a hire-purchase agreement for a car with monthly payments of £309.22 that he could not afford. 247 Money had verified his income and checked his credit history, which showed defaulted accounts, and calculated he had sufficient funds after existing commitments. The ombudsman found that 247 Money should have obtained more information about Mr M's living expenses given his credit history, but concluded that the open banking evidence did not show this would have revealed unaffordability. Therefore, the complaint was not upheld as the lender would likely have made the same lending decision even with more thorough checks.

The Ombudsman's reasoning

The ombudsman found that 247 Money's checks were not sufficiently proportionate because it failed to obtain information about Mr M's regular living expenses, particularly given his impaired credit history with defaulted accounts. However, the ombudsman concluded that even if 247 Money had obtained further information about living expenses through open banking data, the evidence did not demonstrate that Mr M would have been unable to sustainably make the repayments. The ombudsman also noted that Mr M's current analysis of his expenditure, made retrospectively in support of a compensation claim, was less reliable than explanations he would have provided at the time of lending, when he would have been motivated to present his finances favourably.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website