Not upheld: termination of hire purchase agreement and enforcement of debt recovery complaint against N.I.I.B. Group Limited (trading as Northridge Finance)

Decision detail

Summary

Ms P entered into a hire purchase agreement for a car in May 2024 but began experiencing payment difficulties from August 2024 due to changing personal circumstances. After arrears accumulated to over £2,000 despite a three-month payment concession, Northridge Finance terminated the agreement in January 2026 and sought repayment of over £20,000 outstanding. Ms P complained that the firm had failed to communicate clearly, had not acted with appropriate forbearance, and had acted disproportionately. The ombudsman found that while Ms P faced genuine financial hardship, Northridge Finance had shown forbearance by agreeing to a payment holiday, delaying termination beyond its legal entitlement, and referring Ms P to debt management support, and therefore acted fairly in ultimately terminating the agreement when arrears reached five months.

The Ombudsman's reasoning

The ombudsman found that while Ms P's circumstances had changed through no fault of her own, she had struggled to maintain payments of nearly £400 per month and had repeatedly promised to make full payments without doing so. Although communication issues existed, Ms P was clearly aware of the underlying problem of missed payments. Northridge Finance had shown forbearance by agreeing to a repayment holiday, delaying termination for months after being legally entitled to do so, and referring Ms P to debt management organisations. By the time of termination, arrears had reached approximately five months, which the ombudsman noted approaches the six-month threshold beyond which lenders should not allow arrears to build. The decision to terminate was reasonable given the growing arrears and lack of viable solution.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website