Upheld: Irresponsible lending complaint against Close Brothers Limited t/a Close Brothers Motor Finance
Financial Ombudsman decision DRN-6466210 of 2026-07-01T00:00:00+00:00. Irresponsible lending complaint against Close Brothers Limited t/a Close Brothers Motor Finance. Outcome: Upheld.
Decision detail
| Reference | DRN-6466210 |
|---|---|
| Decision date | 2026-07-01T00:00:00+00:00 |
| Firm | Close Brothers Limited t/a Close Brothers Motor Finance |
| Product | Motor finance (PCP / HP) |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Close Brothers must: (1) End the Agreement with nothing further to pay; (2) Refund all payments made by Mr P less fair usage of £255 per month (totalling £10,455 to June 2026, accruing at £255 per month thereafter); (3) Refund any overpayments with simple interest at Bank of England base rate plus 1% from date of overpayment to settlement; (4) If underpaid, agree an affordable and sustainable repayment plan for the outstanding balance; (5) Remove any adverse information from Mr P's credit file once the account is clear. |
Summary
Mr P complained that Close Brothers irresponsibly provided a Conditional Sale Agreement for a car in January 2023 without conducting reasonable and proportionate affordability checks. Close Brothers claimed they had verified Mr P's declared income of £2,000 per month but could not produce the validation tools or data used. The ombudsman found that Mr P's actual regular income was approximately £1,436 per month (with variable income sources ceasing after November 2022) and his essential monthly expenditure was approximately £1,830, creating a shortfall. The ombudsman upheld the complaint, finding the Agreement was unaffordable and unsustainable, and ordered Close Brothers to end the Agreement, refund payments less fair usage of £255 per month, and remove adverse credit file information.
The Ombudsman's reasoning
Close Brothers failed to disclose the validation tools and data they relied upon for their income and expenditure assessment, preventing verification of their affordability checks. When assessed against what reasonable and proportionate checks would have revealed using Mr P's bank statements, his actual regular income was approximately £1,436 per month (not £2,000) and his essential monthly expenditure was approximately £1,830, creating a shortfall. Therefore, Close Brothers did not make a fair decision to provide credit as the Agreement was not affordable or sustainable for Mr P in January 2023.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Close Brothers Limited t/a Close Brothers Motor Finance, all decisions | 1 | 100% |
| Irresponsible lending, all decisions | 30,770 | 37% |
| Motor finance (PCP / HP), all decisions | 19,529 | 38% |
Source
Read the original decision on the Financial Ombudsman Service website