Not upheld: irresponsible lending complaint against Stellantis Financial Services UK Limited

Decision detail

Summary

Miss J complained that Stellantis irresponsibly provided her with a conditional sale agreement for a used car in December 2021 without conducting adequate affordability checks. The ombudsman found that Stellantis's initial checks were not reasonable and proportionate, as they failed to verify income or enquire about essential expenditure. However, the ombudsman concluded that had proportionate checks been conducted, they would likely have shown Miss J could sustainably afford the repayments based on her income, committed expenditure, and previous successful repayment of a similar car finance agreement. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

Although Stellantis's initial affordability checks were not reasonable and proportionate, the ombudsman proceeded to consider what proportionate checks would likely have revealed. Based on review of bank statements and Miss J's financial circumstances, proportionate checks would have shown sufficient income to meet existing commitments, essential expenditure, and new monthly repayments. Miss J's previous successful repayment of a similar car finance agreement and her increased income since the previous lending decision further supported affordability. The high debt-to-income ratio and credit utilisation were indicators requiring deeper checks but were not sufficient in themselves to conclude the lending was irresponsible.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website