Upheld: Irresponsible lending complaint against Evolution Lending Limited
Financial Ombudsman decision DRN-5822218 of 2025-09-19T00:00:00+00:00. Irresponsible lending complaint against Evolution Lending Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5822218 |
|---|---|
| Decision date | 2025-09-19T00:00:00+00:00 |
| Firm | Evolution Lending Limited |
| Product | Mortgage |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Evolution Lending Limited must: (1) remove all interest and fees from the loan, leaving only the capital borrowed; (2) treat all payments made by Mr E and Miss S as capital reduction; (3) refund any excess payments with 8% simple interest from date of payment to settlement; (4) if a balance remains, arrange an affordable repayment plan while retaining security over the property; (5) amend Mr E and Miss S's credit files to reflect the revised position; (6) not charge any further interest or fees. |
Summary
Mr E and Miss S complained that Evolution Lending Limited approved a secured second charge loan of £29,000 without properly assessing affordability. Evolution recorded their expenditure at £4,572.99 monthly against income of £5,081.17, leaving minimal disposable income after stress testing. However, Evolution's own financial standing report showed actual expenditure significantly higher than declared across multiple categories, and subsequent bank statements confirmed consistent overspending. The ombudsman upheld the complaint, finding Evolution had reason to doubt the declared figures but failed to seek proper verification. Evolution was ordered to remove all interest and fees, treat payments as capital reduction, refund excess amounts with interest, and arrange affordable repayment of any remaining balance.
The Ombudsman's reasoning
Evolution failed to comply with MCOB 11.6 responsible lending requirements. Although the financial standing report was potentially sufficient in principle, it showed expenditure significantly higher than what Mr E and Miss S declared. Evolution had common-sense reasons to doubt the accuracy of the declared figures but unreasonably accepted explanations at face value without proper verification. The report and subsequent bank statements demonstrated consistent overspending relative to income, making the loan unaffordable and unsustainable. A responsible lender should have either declined the application or sought further verification through extended bank statements before approving the loan.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Evolution Lending Limited, all decisions | 38 | 57% |
| Irresponsible lending, all decisions | 29,406 | 38% |
| Mortgage, all decisions | 25,098 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website