Not upheld: Irresponsible lending complaint against Santander Consumer (UK) Plc trading as YOU Yamaha Motor Finance

Decision detail

Summary

Mr T complained that SCUK irresponsibly lent to him for a motorbike conditional sale agreement, arguing the firm failed to adequately disclose comprehensive insurance requirements, failed to explain onerous contract terms regarding total loss liability, and failed to conduct proper affordability checks. After an accident left Mr T unable to work and the motorbike was subsequently stolen, he was left liable for remaining payments despite having only third party insurance. The ombudsman found SCUK clearly stated the comprehensive insurance requirement in the agreement and was not responsible for ensuring Mr T obtained it, only for informing him of the requirement. Although SCUK's affordability checks lacked income verification, the ombudsman concluded proportionate checks would have shown the agreement was affordable based on Mr T's actual income of £1,100-£1,500 monthly. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that SCUK adequately informed Mr T of the comprehensive insurance requirement by clearly stating it on the first page of the credit agreement. Although Mr T believed he had comprehensive insurance, SCUK was not responsible for ensuring he actually obtained it, only for informing him of the requirement. The ombudsman rejected the argument that the insurance certificate wording should have prompted further questioning, as the prescribed wording certifies minimum cover is provided but does not state only minimum cover is provided. Regarding affordability, while SCUK's checks were lacking in not obtaining Mr T's income information, the ombudsman reviewed bank statements and concluded that proportionate checks would have shown the agreement was affordable based on Mr T's actual income of £1,100-£1,500 monthly and lack of regular committed expenditure. The ombudsman found no evidence of material failing in the sales process and rejected arguments about commission creating unfairness, noting commission arrangements are standard and Mr T's broader commission complaint should be raised separately with SCUK.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website