Not upheld: irresponsible lending and unaffordable credit complaint against Santander Consumer (UK) PLC (trading as Santander Consumer)

Decision detail

Summary

Mrs A, a pensioner on low income, complained that Santander CF unfairly entered into a conditional sale agreement for a £26,250 car in November 2023, with total repayments of £32,413.39 over 49 months. She argued the agreement was unaffordable given her financial circumstances. Santander CF had conducted an income and expenditure assessment and credit searches showing no adverse history, but did not verify actual living expenses. The ombudsman found that while Santander CF's checks were not sufficiently thorough, further investigation using information Mrs A later provided would have shown she had sufficient income after committed expenses to make sustainable repayments, so the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged that Santander CF's proportionality checks were insufficient given the term of the agreement and its total cost, and should have included verification of actual living expenses. However, when applying what reasonable checks would have revealed—using the information Mrs A later provided about her committed expenditure—the ombudsman found that Mrs A's income, even after deducting committed living expenses and credit commitments, was sufficient to sustainably make the required repayments. Therefore, more thorough checks would not have prevented the lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website