CarCashPoint Limited · DRN-4187311

The complaint Mr B complains that CarCashPoint Limited (“CCPL”) irresponsibly granted him a logbook loan (“loan”) he couldn’t afford to repay. What happened In June 2022 CCPL granted Mr B a loan for £1,560 secured against his car. Under the terms of this loan – everything else being equal – Mr B undertook to pay CCPL 36 monthly payments of £168.14 making a total repayable of £6,053.04 at an APR of 230.68%. In January 2023 Mr B complained to CCPL that its decision to lend to him in June 2022 was irresponsible. In response CCPL issued Mr B with a final response letter (“FRL”). Under cover of this FRL CCPL said it was satisfied its decision to lend to Mr B was responsible. Mr B’s complaint was considered by one of our adjudicators who concluded that it should be upheld. In summary he said he was satisfied that CCPL had carried out reasonable and proportionate checks. But having carried out those checks it should have concluded it wasn’t appropriate (on the grounds of affordability) to lend to Mr B. CCPL responded to the adjudicator’s view to say that it disagreed with it. The adjudicator considered CCPL’s response to his view but wasn’t persuaded to change his mind. And because of this Mr B’s complaint was passed to me for review and decision. In May 2023 I issued a provisional decision in which I said, in summary: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. CCPL will be familiar with all the rules, regulations and good industry practice we consider when looking at a complaint concerning unaffordable and irresponsible lending. So, I don’t consider it necessary to set all of this out in this decision. Information about our approach to these complaints is set out on our website. I would also like to make it clear that I’m only considering in this decision Mr B’s complaint that CCPL irresponsibly granted him a loan he couldn’t afford to repay. I’m not considering any other complaint Mr B might have about CCPL including, but not restricted to, its management and administration of that loan after it was granted. CCPL says that before agreeing to lend to Mr B it completed a credit reference agency check, reviewed Mr B’s bank statements for the three month period April to June 2022 and other relevant information. And like the adjudicator I’m satisfied that these checks were both reasonable and proportionate.

-- 1 of 4 --

So, what I now need to decide is having carried out both reasonable and proportionate checks did CCPL make a fair lending decision. The adjudicator concluded that CCPL didn’t, but I disagree. Let me explain why. As well as asking Mr B what his income and expenditure was, CCPL carried out a detailed analysis of his bank account activity to independently verify the same. And having carried out this analysis it concluded that Mr B had a net disposable monthly income, after paying its loan cost of £168, of £151. Now I’ve reviewed CCPL’s analysis of Mr B’s bank statements and I’m satisfied that its calculation of Mr B’s net disposable monthly income at £151 is both fair and reasonable. And for the avoidance of doubt, I can confirm that I’m satisfied that in coming to a figure of £151 CCPL acted reasonably in not including £332 of cash withdrawals on the grounds these withdrawals were for discretionary expenditure. Now in my view a calculated net disposable monthly income of £151 (after paying CCPL’s loan cost of £168 and non-discretionary expenditure of £126) was enough for CCPL to have fairly decided to lend to Mr B. But if a council tax cost of £120 was excluded from the calculation (on the grounds it wasn’t a liability payable by Mr B) and bank credits (over and above Mr B’s basic salary of £4,185) were included in the calculation it could be said that Mr B’s net disposable monthly income (after paying CCPL’s loan cost of £168) was substantially more than £151. I also think that the above analysis needs to be considered in conjunction with the other checks CCPL says it undertook. CCPL said its checks ‘returned’ no county court judgements, defaults or arrears in Mr B’s name or any bankruptcy proceedings. Now I’ve not seen a copy of these checks, but in the absence of any evidence from Mr B to the contrary, I’ve no reason to doubt what CCPL says in this respect. The above, together with Mr B’s confirmation that in June 2022 he had been with the same employer for more than two years and the fact that between April and June 2022 Mr B’s bank account was never more than £51 overdrawn, only ever overdrawn for a few days, and no payments (such as direct debits and standing orders) were not paid, leads me to conclude that CCPL didn’t act irresponsibly in lending to Mr B in June 2022. Finally, I don’t dispute that shortly after being granted the loan Mr B may have experienced financial difficulties. But this, in itself, doesn’t mean CCPL acted irresponsibly in lending to him in the first place in June 2022. I realise this won’t be the outcome Mr B was hoping for, but I’ve simply seen insufficient evidence to conclude that this logbook loan was irresponsibly granted. Mr B responded to say he disagreed with my provisional decision and to provide me with what he says is evidence that he has three CCJs (totalling just over £2,000), an October 2019 registered default (for approximately £10,000) and over £14,000 in debt. CCPL responded to provide me with evidence of the credit check it undertook in June 2022 and what this check ‘uncovered’, this being that:  Mr B had 0 CCJ’s registered against him  Mr B had credit (across 8 accounts) of a little over £1,750  Mr B had 6 defaults registered against him totalling a little over £1,500

-- 2 of 4 --

 the largest default was for £500  the latest default (for £71) was over six months old  the other 5 defaults were between two and half and five and half years old  there was no record of a default registered in October 2019 for approximately £10,000 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. First I would like to make it clear that I’m satisfied that both parties have had sufficient time to provide everything they would like me to take into account in this case. And because of this I see no reason to delay the issue of this decision. Mr B questions how I’m able to come to a different finding to that of the adjudicator. Put simply I’m not bound by what an adjudicator may have found. My role is to make a finding based on what I believe to be fair and reasonable in all the circumstances and this can, on occasions (as is the case here) be different to the findings of the adjudicator. I don’t dispute that Mr B may currently have three CCJs registered against him. But he has provided no evidence as to when these were ‘first’ registered and it’s entirely possible they were registered after June 2022. But even if this isn’t the case, I’m satisfied – based on what CCPL has now provided our service – that its credit check (undertaken in good faith in June 2022) ‘returned’ no CCJs registered against Mr B. I also don’t dispute that Mr B may currently have a default registered against him (for over £10,000) dated October 2019. But I’m satisfied – based on what CCPL has now provided our service – that its credit check (undertaken in good faith in June 2022) didn’t return this default. And on this point I would add that CCPL can’t be held responsible for what other businesses might register (if anything), when and with what credit reference agency. I will now turn to what was clearly the recording, in June 2022, of six defaults in Mr B’s name. In my provisional decision I said “CCPL said its checks ‘returned’ no county court judgements, defaults or arrears in Mr B’s name or any bankruptcy proceedings. Now I’ve not seen a copy of these checks, but in the absence of any evidence from Mr B to the contrary, I’ve no reason to doubt what CCPL says in this respect.” But actually, what CCPL said is that its checks ‘returned’ “[no] current arrears or defaults of debt” [my emphasis]. Now I don’t know how CCPL defines ‘current’. But having reviewed the outcome of the credit check it undertook I don’t think it was unreasonable for it to conclude that the existence of these six defaults weren’t, in themselves, grounds for it to not lend. I would also add that when considering whether CCPL made a fair lending decision regards to the market in which it operates needs to be taken into account. For the sake of completeness, I can confirm that I’ve considered again CCPL’s calculation of Mr B’s net disposable monthly income. And having done so I remain of the view that calculation is, in all material respects, accurate and a calculated net disposable monthly income of £151 shouldn’t have caused CCPL to conclude it shouldn’t lend to Mr B. I would also like to reiterate that it could be said (for reasons I don’t repeat here) that Mr B had a disposable net income of more than £151.

-- 3 of 4 --

It's clear from Mr B’s response to my provisional decision that he has very strong feelings about this case. But having regards to what both parties have said and submitted, both originally and in response to my provisional decision, I remain of the view for the reasons given in my provisional decision and above that CCPL didn’t act irresponsibly in lending to Mr B in June 2022, and it need do nothing further. My final decision My final decision is I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 12 July 2023. Peter Cook Ombudsman

-- 4 of 4 --