Not upheld: Motor finance commission (DCA) complaint against Go Car Credit Limited

Decision detail

Summary

Mr W complained that Go Car Credit Limited acted unfairly when providing a hire purchase agreement in 2018, citing non-disclosure of commission, inadequate affordability checks, and an unfairly high interest rate of approximately 49% APR. Go Car denied wrongdoing, confirming no commission was paid, affordability checks were completed, and the interest rate was clearly disclosed. The FOS investigator and ombudsman both found no breach, confirming the rate was clearly explained to Mr W in both the phone application and written agreement, and that Go Car's higher rates were justified as a subprime lender reflecting legitimate credit risk. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman confirmed that while the FOS service must ensure interest rates are clearly explained and disclosed, it does not have authority to dictate what interest rates a lender should charge. The rate applied to Mr W was clearly set out both verbally and in the written agreement, allowing him to make an informed decision. Go Car operates as a lender of last resort for consumers with credit difficulties, and the high rate reflected legitimate risk factors in Mr W's credit profile. The ombudsman found no breach of regulatory obligations or unfairness in the lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website