Not upheld: irresponsible lending and inadequate point-of-sale information complaint against Specialist Motor Finance Limited

Decision detail

Summary

Mr P complained that SMFL irresponsibly provided him with a hire purchase agreement for a car in June 2023 and failed to adequately explain the interest and charges. SMFL's affordability assessment relied partly on Mr P's overtime income, which was not guaranteed. Mr P subsequently missed or paid late 11 out of 33 payments and claimed he was vulnerable and under pressure at the time of sale. The ombudsman found that while SMFL should have made better enquiries about overtime income, it was reasonable to assume Mr P would continue receiving some overtime based on his recent consistent receipt of it, and that the lending appeared affordable at the time of sale. The ombudsman rejected arguments about vulnerability, noting SMFL was not made aware of any financial difficulties at the time of sale, and found the point-of-sale information was adequate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that SMFL's affordability checks were reasonable and proportionate given the amount lent and what it knew about Mr P's circumstances. Although SMFL should have made better enquiries about the reliability of overtime income, the ombudsman concluded it was reasonable to assume Mr P would continue to receive some overtime given he had consistently received it for at least three months prior to lending. The ombudsman rejected arguments about vulnerability, noting that SMFL was not made aware of any financial difficulties at the time of sale and that the benefit assessment was dated after the lending. The ombudsman also found the point-of-sale information was adequate and that Mr P's subsequent repayment difficulties did not alter the fact that the finance appeared affordable at the time of sale based on the information available to SMFL.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website