Not upheld: irresponsible lending and mis-selling regarding borrower status complaint against Stellantis Financial Services UK Limited (trading as Vauxhall Finance)

Decision detail

Summary

Miss G and Mrs M complained that Vauxhall Finance irresponsibly lent to them for a car on a conditional sale agreement for £8,893.00 over 60 months at £182.68 monthly, claiming the payments were unaffordable. They also claimed Mrs M was misled into believing she was only a guarantor rather than a joint borrower. The ombudsman found that while Vauxhall Finance's initial checks lacked information on actual income and living expenses, proportionate checks would have shown the payments were affordable based on Mrs M's financial circumstances. The ombudsman also found that the credit agreement clearly identified Mrs M as a joint borrower and that she would be in a materially similar position either way. The complaint was not upheld.

The Ombudsman's reasoning

While Vauxhall Finance's initial checks were insufficient as they lacked information on actual income and living expenses, the ombudsman applied the test of what proportionate checks would likely have shown. Based on Mrs M's financial information provided to the ombudsman, proportionate checks would have revealed she had sufficient funds to make sustainable repayments after deducting committed expenses and existing credit commitments. Any contribution from Miss G would have made payments even more affordable. Therefore, even with proper checks, the lending would likely have proceeded. Regarding the guarantor/joint borrower issue, the credit agreement itself clearly stated Mrs M was a joint borrower, and the ombudsman found she would be in a materially similar position either way given the subsequent arrears.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website