Upheld: Irresponsible lending complaint against Evolution Lending Limited
Financial Ombudsman decision DRN-6020483 of 2026-01-15T00:00:00+00:00. Irresponsible lending complaint against Evolution Lending Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6020483 |
|---|---|
| Decision date | 2026-01-15T00:00:00+00:00 |
| Firm | Evolution Lending Limited |
| Product | Mortgage |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Evolution must: (1) recalculate the loan balance removing all fees and interest charged to date, leaving only the £50,000 capital; (2) apply all payments made to date against the capital balance; (3) if outstanding capital remains, work with Mr and Mrs L on an affordable repayment arrangement while retaining the charge; (4) if capital is fully repaid, remove the charge and refund any overpayment with 8% simple annual interest from payment date; (5) remove all loan information from Mr and Mrs L's credit files. No compensation awarded for distress and inconvenience. |
Summary
Mr and Mrs L complained that Evolution Lending Limited irresponsibly lent them a £50,000 secured loan in January 2020 by failing to properly assess affordability. The loan was taken by Mr L (self-employed) and Mrs L (not working, receiving child benefit and carer's allowance) over 15 years at 14.03% interest. Evolution included Mrs L's child benefit and carer's allowance in the affordability assessment, but the ombudsman found this was unreasonable because the child was 17 and would turn 18 within months (ending child benefit entitlement), and the carer's allowance was contingent on Mrs L's caring responsibilities. The ombudsman rejected Evolution's argument that Mrs L would find employment to replace lost benefits, finding this relied on hypothetical circumstances rather than actual circumstances. The complaint was upheld and Evolution was directed to remove all fees and interest, recalculate the balance based on capital only, and remove the loan from the credit file.
The Ombudsman's reasoning
The ombudsman applied mortgage lending rules requiring affordability assessment over the life of the loan, accounting for likely future changes. The child benefit was unreasonable to include because the child was 17 and would turn 18 within months, ending entitlement shortly after completion. The carer's allowance was unreasonable to include because it was contingent on Mrs L's caring responsibilities and not guaranteed over 15 years. The ombudsman rejected Evolution's argument that Mrs L would find employment to replace lost benefits, finding this was based on hypothetical circumstances rather than actual circumstances at application, and noting that carer's allowance eligibility restrictions would limit Mrs L's ability to work sufficient hours to replace the lost income.
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