Not upheld: irresponsible lending / affordability assessment complaint against Moneybarn No.1 Limited trading as Moneybarn

Decision detail

Summary

Miss K complained that Moneybarn lent to her irresponsibly in March 2016 for a £5,500 car finance agreement, citing her poor credit history at the time. Moneybarn had verified her income at £1,314 per month, reviewed her credit file showing £1,718 in existing debt with no missed payments or defaults, and calculated she had £328.52 monthly disposable income. Miss K made all payments on time except one late payment in June 2018 which she rectified within a week, and settled the agreement early in September 2019. The ombudsman found Moneybarn's checks were reasonable and proportionate under the applicable regulations, rejected the argument that bank statements should have been reviewed, and upheld the lender's decision as fair given the circumstances.

The Ombudsman's reasoning

The ombudsman applied the FCA's CONC 5.3 regulations requiring reasonable and proportionate checks. Moneybarn verified income through payslips, reviewed the credit file, checked for missed payments and defaults, and estimated disposable income at £328.52 monthly. The ombudsman rejected the argument that bank statements should have been reviewed, noting there was no obligation to do so. Given the findings from these checks and Miss K's subsequent good payment history, the lending decision was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website