Upheld: irresponsible lending - inadequate affordability checks complaint against Startline Motor Finance Limited
Financial Ombudsman decision DRN-6348534 of 2026-05-13T00:00:00+00:00. irresponsible lending - inadequate affordability checks complaint against Startline Motor Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6348534 |
|---|---|
| Decision date | 2026-05-13T00:00:00+00:00 |
| Firm | Startline Motor Finance Limited |
| Product | hire purchase agreement (car finance) |
| Claim type | irresponsible lending - inadequate affordability checks |
| Outcome | Upheld |
| Remedy | Startline must: (1) End the agreement with nothing further to pay and collect the car at no cost; (2) Refund the £2,925 deposit plus 8% simple interest per year from date of payment; (3) Calculate total payments made by Mr D and deduct £12,750 for fair usage (£375/month for 34 months of use), either refunding any overpayment with 8% interest or setting up an affordable repayment plan for any shortfall; (4) Remove all adverse information regarding the agreement from Mr D's credit file once any outstanding balance is settled. |
Summary
Mr D complained that Startline Motor Finance Limited lent to him irresponsibly when approving a £15,725 hire purchase agreement in June 2023. Although Startline conducted basic checks including a payslip review and credit history assessment, the ombudsman found these were not proportionate given Mr D's large borrowing amount, long 56-month term, and recent history of defaults, missed utility payments, and rejected direct debits on a previous Startline agreement. Upon reviewing Mr D's bank statements, the ombudsman discovered Mr D had engaged in extensive gambling (over £8,500 in two months) that was causing financial harm and resulting in missed payments. The ombudsman upheld the complaint, finding that proportionate checks would have revealed this gambling problem and made responsible lending impossible. Startline was ordered to end the agreement, refund the deposit with interest, and adjust payments to reflect fair usage of the vehicle.
The Ombudsman's reasoning
The ombudsman found that while Startline conducted some checks (payslip, credit history, statistical cost of living estimates), these were not proportionate to the circumstances. Given the large borrowing amount, long repayment period, and Mr D's recent history of defaults, missed payments, and rejected direct debits, more thorough checks were required. The ombudsman reviewed Mr D's bank statements and discovered extensive gambling activity (over £8,500 in two months) that was causing financial harm and resulting in missed payments. This gambling problem would have been apparent through proportionate checks and would have made the lending irresponsible, despite the agreement appearing technically affordable based on statistical estimates.
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