Not upheld: irresponsible lending / unaffordable lending complaint against Moneybarn No.1 Limited

Decision detail

Summary

Mr N complained that Moneybarn unfairly entered into a conditional sale agreement for a car in December 2020, claiming the monthly payments of £418.54 were unaffordable because he was self-employed with unstable income due to pandemic lockdown restrictions. Moneybarn had assessed the application based on payslips showing monthly income of approximately £2,000 and credit checks showing previous defaults but no CCJs. Mr N later claimed the payslips were fabricated and that he had engaged an unregulated individual to help with his application. The ombudsman found that Moneybarn was reasonably entitled to accept the payslips in good faith as they appeared authentic and contained Mr N's correct personal details, and that the unregulated individual was introduced by Mr N himself, not Moneybarn. The ombudsman concluded that even if Moneybarn had conducted more thorough checks into living expenses, the repayments would have been affordable based on the income Mr N confirmed by signing the Explanation Document, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Moneybarn was reasonably entitled to accept the payslips in good faith as they appeared authentic and contained Mr N's correct personal details. Although the payslips may have been fabricated by an unregulated third party that Mr N introduced, Moneybarn did not commission them and was not responsible for their creation. The ombudsman concluded that even if Moneybarn had conducted more thorough checks into Mr N's living expenses, the repayments would still have been affordable when calculated against the income figure Mr N himself confirmed by signing the Explanation Document. The ombudsman was also skeptical of Mr N's current claims about his actual income, noting that at the time of application he clearly wanted the car and would have been motivated to present information favourably rather than highlight unaffordability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website