Partially upheld: Irresponsible lending complaint against Toyota Financial Services (UK) PLC, trading as Redline Financial Services

Decision detail

Summary

Miss G complained that Redline irresponsibly granted two hire purchase agreements she could not afford. The first agreement in November 2022 was for £17,242.72 with £283.18 monthly repayments, and the second in September 2024 was for £28,686 with £560.60 monthly repayments. The ombudsman upheld the complaint regarding the first agreement, finding Redline's affordability checks inadequate as they did not verify income or assess living costs, and bank statements showed Miss G would have only £90 disposable income monthly. The second agreement was not upheld as Miss G's increased income to approximately £2,400 monthly would have shown the repayment affordable with proper checks. Redline was ordered to refund overpayments on the first agreement plus interest and remove adverse credit file information.

The Ombudsman's reasoning

For the first agreement, Redline's checks were not reasonable and proportionate as they did not verify income or obtain a full picture of Miss G's financial situation. Bank statements show she would have had only £90 disposable income monthly after the new repayment, insufficient for emergencies. For the second agreement, although checks were similarly inadequate, Miss G's increased income to approximately £2,400 monthly with committed spending of £1,570 would have left approximately £800 disposable income, making the repayment of £560.60 affordable even with proper checks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website