Ombudsman News Issue 91 - Financial Ombudsman Service

case studiesWe did not uphold the complaint.We said there was no evidence tosuggest that she had been misled orthat she had failed to understand theobligation she was taking on. nn 91/6consumer complains that financebusiness should have ensured loanrepayments were affordable beforeapproving her applicationThe business did not accept that it wasin the wrong. It said it had acted entirelyresponsibly and had put her loanapplication through the normal processof credit checks and credit-scoring,based on the information she hadprovided. It therefore saw no reasonwhy she should not be held liable torepay the amount she borrowed.Unhappy with this response,Ms T came to us.Ms T complained that a financebusiness was pursuing her for adebt she was unable to afford.She maintained that the businessshould have checked that she couldafford the repayments before it lenther the money.She said her partner at the time, Mr C,needed to buy a car but had run intodifficulties obtaining finance because ofhis poor credit rating. He had thereforepersuaded her to take out a loan herselfin order to buy the car.She said he promised to give her acash sum each month to cover therepayments. However, after a coupleof months he started paying a smalleramount and eventually he left her,taking the car with him.When the finance business contactedMs T about the arrears, she argued thatthe fault lay with the business itself fornever having made proper checks abouther financial circumstances.complaint not upheldWe noted that in processing Ms T’sapplication, the business had fullycomplied with the Finance and LeasingAssociation code. The applicationform, which Miss T had completed andsigned, stated that she was in full-timeemployment. However, when she madeher complaint to the business she hadsaid she was unemployed.We asked Ms T to explain why sheconsidered the loan to have beenunaffordable from the outset. We alsoasked her to tell us more about heremployment history.We eventually established that shehad been unemployed at the time sheapplied for the loan and had not been inwork since then. She told us it had beenMr T’s idea that she should say she wasin employment, as it seemed unlikelyshe would get the loan otherwise.We did not uphold the complaint. nDecember 2010/January 2011 – page 10