Not upheld: irresponsible lending / unaffordable lending complaint against Billing Finance Limited

Decision detail

Summary

Mr W complained that Billing Finance unfairly entered into a hire-purchase agreement for a used car in April 2018, claiming the monthly payments of £238.75 were unaffordable and that proportionate checks would have revealed this. Billing Finance verified Mr W's income at £1,300 per month via payslips, conducted credit searches showing no adverse information, and assessed affordability using statistical living cost data. The ombudsman found the lender's checks were reasonable and proportionate given Mr W's clean credit history, low existing credit, and living situation with parents, and concluded the payments were affordable based on the information available. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Billing Finance's checks were proportionate given the circumstances. Mr W's income was verified at £1,300 per month, his credit history showed no adverse information, he had low existing credit, and he lived at home with parents. The ombudsman concluded there was nothing to suggest Mr W fell outside the profile of an average borrower, making it reasonable for Billing Finance to rely on statistical data for living cost estimates. Even if further checks had been warranted, the information Mr W subsequently provided did not show his actual living expenses significantly differed from the average data used.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website