Not upheld: Irresponsible lending complaint against Evergreen Finance Limited

Decision detail

Summary

Mr C and Ms C complained that Evergreen Finance Limited irresponsibly approved a hire purchase agreement for a used caravan worth £17,300 with £292 monthly repayments that they could not afford. Mr C had recently started a new job and existing finance commitments, and Ms C was added as a co-borrower. Evergreen reviewed three months of bank statements, income documentation, and credit files showing no defaults before approving the agreement. The ombudsman found the checks were reasonable and proportionate, the bank statements showed positive balances and sufficient disposable income, and therefore the lending decision was justified. The ombudsman also rejected complaints about caravan quality (wear and tear on a seven-year-old vehicle), commercial use restrictions, and a declined payment holiday request.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring lenders to assess whether borrowers could afford repayments in a sustainable manner. The ombudsman found that Evergreen's review of credit files, income, and three months of bank statements was proportionate given the product type and amount. The bank statements showed positive balances (Mr C over £700 monthly, Ms C over £2,500 monthly) and the affordability forms indicated sufficient disposable income. The ombudsman was satisfied this information was sufficient to reasonably conclude the agreement was affordable. Regarding other complaints, the ombudsman found the signatures were properly executed, the caravan defects were wear and tear on a seven-year-old vehicle, the commercial use definition was clear in the terms, and the payment holiday refusal was reasonable given prior payment breaks and existing arrears.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website