Not upheld: Irresponsible lending complaint against Startline Motor Finance Limited

Decision detail

Summary

Miss D complained that Startline Motor Finance Limited lent irresponsibly when providing her with a hire purchase agreement for £21,400 in June 2022. Startline verified Miss D's income at £2,265 per month and conducted an affordability assessment that showed she would have approximately £785 in disposable income after accounting for existing debt repayments and living costs. Although Miss D had previous defaults (most recent four years prior) and one missed payment four months before the application, the ombudsman found Startline's proportionate assessment was reasonable. The ombudsman rejected Miss D's arguments that Startline should have done more income verification, paid greater attention to her credit history, or reviewed her bank statements for undisclosed short-term credit. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Startline carried out a reasonable and proportionate affordability assessment using verified figures where available and reasonably calculated figures where they were not. Based on the information gathered, there was nothing to suggest Miss D was likely to be unable to sustainably repay the credit. The ombudsman rejected arguments that Startline should have done more income verification, paid more attention to credit history, or reviewed bank statements to identify short-term credit not captured by CRA checks. The ombudsman also noted that the final balloon payment should not be considered in affordability assessments as it could be financed separately or the vehicle could remain under Startline's ownership if not paid.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website