Startline Motor Finance Limited · DRN-6318380

The complaint and what happened Mr T complains that Startline Motor Finance Limited lent to him irresponsibly and without carrying out proper affordability checks. He would like all the interest and charges associated with the hire purchase agreement refunded, and any adverse information removed from his credit file. I’ve included relevant sections of my provisional decision from April 2026, which form part of this final decision. In my provisional decision I set out the reasons why I was planning to uphold this complaint. In brief that was because I thought the checks Startline carried out ought to have led it to conclude that this borrowing was not affordable and sustainable for Mr T. I asked both parties to let me have any more information they wanted me to consider. Startline did not respond, and Mr T accepted my outcome. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’m upholding it, and I’ll reiterate why, but first I’ve included here the relevant sections of my provisional decision: “What happened In October 2022 Startline approved a hire purchase agreement for Mr T, which was used to buy a car. Mr T used the car he already owned in part exchange to provide a deposit of £2,315. The lending was scheduled to be repaid at approximately £492 per month over a term of 60 months. Mr T struggled to make repayments from the first month of the agreement, and it appears that it was settled via a voluntary termination in July 2025. The investigator looked at the evidence and thought Startline hadn’t done anything wrong in approving the agreement. Mr T disagreed and asked an ombudsman to look at his complaint. What I’ve provisionally decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’m currently planning to uphold it, and I’ll explain why. Startline is aware of its obligations under the rules and regulations in place at the time of this lending decision, including the Consumer Credit Sourcebook (“CONC”), so I won’t repeat them here. But, briefly, it was required to carry out sufficient checks to ensure that Mr T would be able to repay the borrowing applied for in a sustainable way. As set out in CONC 5.3.1G(2) that means that he could manage the repayments, “…without…incurring financial difficulties or experiencing significant

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adverse consequences” Essentially, he needed to be able to meet his financial commitments and not have to borrow elsewhere to repay Startline for the hire purchase agreement to be considered affordable and sustainable. There are two questions I need to consider when deciding this case, which I will deal with separately below. Did Startline carry out proportionate checks before granting this loan? Starline carried out a credit check; verified Mr T’s income by gathering pay slips; and seems to have estimated his expenditure using data from the Office for National Statistics. In common with the investigator, and for broadly the same reasons, I do not think these checks were proportionate to the circumstances. I say so because the credit check showed both a long-standing and recent history of financial difficulties including a multitude of defaults and two outstanding County Court Judgments (CCJs) in relation to unpaid debts. One CCJ was from September 2021, only a year before this application. In addition to that, the proposed repayment of approximately £492 represented a sizeable proportion of Mr T’s income of approximately £1,836 per month, at over 26%. Taking those factors in tandem with the fact that he needed to sustain these repayments for five years, I think Startline needed to consider Mr T’s financial situation in rather more detail to satisfy itself that this agreement was affordable for him. What would Startline have likely found, and what ought it to have concluded, had it carried out proportionate checks? When considering this second question, our service has had the benefit of several months of bank statements from Mr T’s current account; his wife’s current account and their joint current account to review. I accept that there was and is no requirement on a lender to obtain any particular type of information: they are permitted to source and rely on a range of evidence when assessing affordability, and so Startline could have opted to gather more information about Mr T’s financial position in a range of ways. It was under no obligation to review any bank statements and could have looked further at this application without asking for such evidence. However, the fact remains that it didn’t, and, in the absence of anything else provided, I’m happy to rely on the statements to demonstrate what Startline would most likely have discovered if it had completed proportionate checks. I should say that I asked Mr T to provide more in-depth evidence after reviewing statement for his current account. That was because, in summary, much of Mr T’s income was transferred to his wife. It’s clear that the usual household bills were not being paid through Mr T’s account and, in fairness to Startline, I wanted to gain a more in-depth understanding of Mr T’s family finances. I say, “…in fairness to Startline…”, because there could be a simplistic answer to the question of what Startline would have likely found had it asked any further questions. A cursory glance at Mr T’s statements shows that generally within hours of being paid, he had no money left in his account. And that is not due to large amounts of discretionary spend. So at no point in the course of a month could there have been any possibility of Mr T having £492 sitting in his account to pay Startline. However, as the pattern of transfers didn’t tell me very much about what the money was actually being used for, I asked Mr T for further information. With his wife’s, and their joint account’s, statements, the situation becomes clear very quickly. Essentially, he was using his income to meet repayments and standard household bills after it had been transferred to his wife and/or their joint account.

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I then went on to consider whether either Mrs T’s account, or their joint account, was acting as a repository for family funds on which potentially Mr T could have drawn in order to meet these repayments. Very clearly they were not. Neither account had much in the way of a positive balance once normal bills and debts were met. And indeed one account was almost permanently overdrawn. As an aside, I would like to point out that it is not always necessary to consider a partner’s income when reviewing cases such as these. Ultimately, this was a credit agreement for which only Mr T was liable. But it was the particular pattern of usage on Mr T’s account which led me to looking into his family finances in quite such depth. In the round, I cannot see how any further checks or questions Startline could have asked (not just reviewing bank statements) would have led it to conclude that Mr T would not need to borrow elsewhere in order to meet the monthly repayments on this agreement. (And given his credit history, I’m not sure where he could have borrowed from.) As explained, even if he could have borrowed to meet repayments, that would not have been affordable and sustainable for Mr T, bearing in mind the regulations in force at the time. So it follows that I plan to uphold this complaint.” As mentioned above, Startline has not responded to my findings, and Mr T has accepted them. Therefore I have seen nothing which alters my findings as set out in my provisional decision. And so it follows that I uphold this complaint Putting things right Startline should never have entered into this agreement with Mr T. So I now require it to put Mr T into the position he would have been in, had the agreement never existed. To do that, the following factors are pertinent: ➢ That the cash price of the car was £21,896.00, equating to a cost of about £365 per month over the life of the agreement. ➢ That Mr T paid a deposit of £2,315.00. ➢ That the APR on the agreement was 17.9%, and the charge for credit was £9,546.40. ➢ That he had use of the car for about 33 months. And so, I direct Startline to do the following: A) Refund the £2,315 deposit (that was the equity it deemed to have been present in Mr T’s previous car) adding 8% simple interest per year from the date of payment to the date of settlement. B) Calculate how much Mr T has paid to it via monthly repayments under the hire purchase agreement and deduct £12,045 for fair usage of the car for around 33 months. If a balance remains, meaning that Mr T has paid more than the fair usage charge, Startline must refund those overpayments, again adding 8% simple interest per year from the date of payment to the date of settlement. C) Refund any charges and fees that were paid by Mr T as a result of repayment difficulties, again adding 8% simply interest per year from the date of payment to the date of settlement. D) Remove any adverse information recorded on Mr T’s credit file in relation to this agreement. *HM Revenue & Customs requires Startline to deduct tax from this interest. It should give Mr

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T a certificate showing how much tax it’s deducted, if he ask for one. My final decision For the reasons I’ve explained, I uphold this complaint and direct Startline Motor Finance Limited to put things right as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 25 May 2026. Siobhan McBride Ombudsman

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