Not upheld: irresponsible lending / unaffordable credit complaint against Oodle Financial Services Limited (trading as Oodle Car Finance)

Decision detail

Summary

Mr F complained that Oodle unfairly entered into a hire-purchase agreement for a car with unaffordable monthly payments of £212.87. Oodle had obtained Mr F's income and employment details and conducted credit searches revealing a historic default, but relied on estimated living costs rather than detailed expenditure information. The ombudsman found Oodle's checks were insufficient but determined that even with proportionate checks, the payments would have appeared affordable based on Mr F's income minus reasonable living expenses and existing credit commitments. The ombudsman rejected Mr F's subsequent bank statement analysis as including expenditure not reasonably expected to continue throughout the agreement term and noted that lenders are not required to obtain bank statements. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged that Oodle's proportionality checks were insufficient given the adverse credit information on file. However, the ombudsman applied the principle that insufficient checks alone do not warrant upholding a complaint unless it can be demonstrated that proper checks would have revealed unaffordability. When the ombudsman reconstructed what proportionate checks would have shown using Mr F's actual expenditure data, the monthly payments appeared affordable after deducting reasonable living expenses and existing credit commitments from his income. The ombudsman also noted that Mr F's bank statement analysis included expenditure he would not reasonably be expected to maintain throughout the agreement term, and that lenders are not required to obtain bank statements. Additionally, the ombudsman considered that Mr F's current submissions are made in support of a compensation claim and would likely differ from representations made at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website