Not upheld: irresponsible lending and inadequate support during financial difficulties complaint against Evergreen Finance Limited

Decision detail

Summary

Mr W and Mrs W complained that Evergreen Finance irresponsibly lent them £26,760 via a hire purchase agreement in June 2017 for a static caravan, and that the firm failed to provide adequate support when they experienced financial difficulties. The ombudsman found that Evergreen Finance conducted reasonable affordability checks showing disposable income of approximately £675-£657 per month for each applicant, and that even accounting for an existing loan repayment of £146 and ground rent of £400, approximately £784 remained available to cover the HPA and unforeseen costs. The ombudsman noted that Mr W's retirement in July 2017 was not disclosed at the time of application, and that the applicants' discussions with a debt charity were not made known to the firm. When Mrs W contacted the firm in April 2020 regarding financial difficulties, the ombudsman found the firm's offer of a payment break and provision of termination details to be reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Evergreen Finance's checks were reasonable and proportionate to the type and amount of credit being provided. Although details of existing credit commitments were not explicitly included in the application, the ombudsman used bank statements to assess what would have been identified and found that with the existing loan repayment of £146 and ground rent of £400 deducted, approximately £784 of disposable income remained to cover the HPA and unforeseen costs, which did not suggest the lending was unaffordable. The ombudsman also found it reasonable for Evergreen Finance to rely on the information provided regarding Mr W's employment status, as both applicants had signed a declaration stating they were not aware of potential changes in circumstances. When financial difficulties arose in April 2020, the ombudsman considered the firm's offer of a payment break and provision of termination details to be reasonable support.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website