Upheld: Irresponsible lending complaint against Evolution Lending Limited
Financial Ombudsman decision DRN-5928216 of 2025-11-17T00:00:00+00:00. Irresponsible lending complaint against Evolution Lending Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5928216 |
|---|---|
| Decision date | 2025-11-17T00:00:00+00:00 |
| Firm | Evolution Lending Limited |
| Product | Other regulated product |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Evolution Lending Limited must: (1) bring the loan agreement to an end; (2) remove all adverse credit file entries associated with the loan; (3) remove the £2,921.04 fees and all interest charged to date, plus any other fees added over the loan's life; (4) treat all payments made by Mr T as reducing the capital balance; (5) if a balance remains, reach a sustainable arrangement for repayment of outstanding capital without future interest; (6) if Mr T has overpaid, refund the excess plus simple annual interest of 8% from when overpayments were made, with deduction for income tax as required by HMRC; (7) Mr T must correspond with Evolution regarding any remaining debt, potentially with assistance from debt advice services, to reach a sustainable arrangement. |
Summary
Mr T took out a secured second charge loan of £24,956 in September 2022 with Evolution Lending Limited at 22.56% interest over 15 years. He subsequently fell into arrears and complained that the loan was unaffordable and irresponsibly lent. The ombudsman upheld the complaint, finding that Evolution's affordability assessment was fundamentally flawed: it reduced Mr T's stated discretionary expenditure figures (food, clothing, socialising) by over £100 per month based on only six weeks of bank statements without verifying the reductions with Mr T, and it failed to account for Mr T's actual new mortgage payment which was £204 per month higher than the figure used in the assessment. When corrected, the assessment showed Mr T would have insufficient income to cover his outgoings. The ombudsman ordered Evolution to end the loan, remove all fees and interest, treat payments as capital reduction, and arrange sustainable repayment of any remaining capital balance without future interest.
The Ombudsman's reasoning
The ombudsman found that Evolution significantly underestimated Mr T's expenditure by reducing his stated figures without verification or discussion, particularly for discretionary items. Evolution failed to obtain details of Mr T's actual new mortgage arrangements, instead using an outdated payment figure that was £204 per month lower than reality. When the correct figures are applied, the loan shows a deficit of approximately £30 per month before stress testing. Additionally, Mr T's credit history demonstrated over-reliance on credit, which should have raised sustainability concerns. The ombudsman concluded Evolution did not take reasonable steps to ascertain affordability and did not conduct a sufficiently robust assessment.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Evolution Lending Limited, all decisions | 38 | 57% |
| Irresponsible lending, all decisions | 29,406 | 38% |
| Other regulated product, all decisions | 52,408 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website