Not upheld: Irresponsible lending complaint against BMW Financial Services (GB) Limited

Decision detail

Summary

Mr T complained that BMW lent to him irresponsibly when providing a £9,450 motor finance agreement in September 2021, arguing that BMW failed to conduct adequate affordability checks. Mr T had recently started employment after a period of study and had no employment income in the three months prior to the agreement, though he had existing savings. The ombudsman found that while BMW's checks were not proportionate to the circumstances, proportionate checks would likely have reached the same conclusion. Analysis of Mr T's bank statements showed he had sufficient monthly income (£1,375) to sustainably cover the loan repayment (£157) plus other committed expenditure (£575), leaving approximately £800 for household expenses. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged that BMW's affordability checks were not proportionate to the circumstances, particularly given the size of the loan and Mr T's recent change in employment status. However, the ombudsman concluded that had BMW carried out proportionate checks (such as reviewing bank statements or verifying expenditure), they would likely have reached the same lending decision. The bank statements showed Mr T had sufficient income (£1,375 monthly) to cover the new loan repayment (£157) plus existing committed expenditure (£575), leaving approximately £800 monthly for household expenses. This was sustainable and would not have increased Mr T's debt in an unsustainable way.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website