Not upheld: Irresponsible lending complaint against Moneybarn No. 1 Limited t/a Moneybarn

Decision detail

Summary

Mrs H complained that Moneybarn irresponsibly provided her with a conditional sale agreement for a car in June 2022 with a 29.9% APR and monthly payments of £237.39, arguing the lender failed to conduct adequate affordability checks. Moneybarn verified Mrs H's declared income of £2,200 per month through CRA checks, examined her existing credit commitments of £8,000, and used ONS data to calculate living expenses, determining she had approximately £700 monthly disposable income. The credit search revealed no defaults, missed payments, arrears, CCJs or IVAs in the 44 months prior to lending. The ombudsman upheld Moneybarn's position, finding the affordability assessment was reasonable and proportionate and that Mrs H was treated fairly, with no requirement for bank statement verification given the circumstances.

The Ombudsman's reasoning

The ombudsman found that Moneybarn's affordability assessment was reasonable and proportionate given the circumstances. The lender verified Mrs H's income through CRA checks, examined her existing credit commitments and payment history, and used ONS statistical data for non-discretionary expenditure. With a calculated disposable income of approximately £700 per month against monthly payments of £237.39, and no recent signs of financial vulnerability or missed payments, the lender was entitled to rely on statistical data rather than requiring full bank statement evidence. The credit search showed Mrs H was managing her existing credit well with no defaults for 44 months.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website