diff --git a/CHANGES.txt b/CHANGES.txt
--- a/CHANGES.txt
+++ b/CHANGES.txt
@@ -1,5 +1,7 @@
 Changelog for HLint (* = breaking change)
 
+3.0.3, released 2020-05-03
+    #965, fix incorrect avoid lambda suggestion
 3.0.2, released 2020-05-03
     #963, don't generate use-section hints for tuples
     #745, fix up free variables for A{x}, fixes list comp hints
diff --git a/hlint.cabal b/hlint.cabal
--- a/hlint.cabal
+++ b/hlint.cabal
@@ -1,7 +1,7 @@
 cabal-version:      >= 1.18
 build-type:         Simple
 name:               hlint
-version:            3.0.2
+version:            3.0.3
 license:            BSD3
 license-file:       LICENSE
 category:           Development
diff --git a/src/GHC/Util/HsExpr.hs b/src/GHC/Util/HsExpr.hs
--- a/src/GHC/Util/HsExpr.hs
+++ b/src/GHC/Util/HsExpr.hs
@@ -176,10 +176,10 @@
   = (noLoc $ HsPar noExtField $ noLoc $ SectionL noExtField e f, \s -> [Replace Expr s [] (unsafePrettyPrint e)])
 
 -- @\vs v -> f x v@ ==> @\vs -> f x@
-niceLambdaR' (unsnoc -> Just (vs, v)) (L _ (HsApp _ (L _ (HsApp _ f e)) (view' -> Var_' v')))
+niceLambdaR' (unsnoc -> Just (vs, v)) (L _ (HsApp _ f (view' -> Var_' v')))
   | v == v'
-  , vars' e `disjoint` [v]
-  = niceLambdaR' vs $ apps' [f, e]
+  , vars' f `disjoint` [v]
+  = niceLambdaR' vs f
 
 -- @\vs v -> (v `f`)@ ==> @\vs -> f@
 niceLambdaR' (unsnoc -> Just (vs, v)) (L _ (SectionL _ (view' -> Var_' v') f))
diff --git a/src/Hint/Lambda.hs b/src/Hint/Lambda.hs
--- a/src/Hint/Lambda.hs
+++ b/src/Hint/Lambda.hs
@@ -8,7 +8,7 @@
     Rules:
     fun a = \x -> y  -- promote lambdas, provided no where's outside the lambda
     fun x = y x  -- eta reduce, x /= mr and foo /= symbol
-    \x -> y x  -- eta reduce
+    \x -> y x ==> y -- eta reduce
     ((#) x) ==> (x #)  -- rotate operators
     (flip op x) ==> (`op` x)  -- rotate operators
     \x y -> x + y ==> (+)  -- insert operator
@@ -90,6 +90,7 @@
 {-# LANGUAGE QuasiQuotes #-}; authOAuth2 = foo (\name -> authOAuth2Widget [whamlet|Login via #{name}|] name)
 f = {- generates a hint using hlint.yaml only -} map (flip (,) "a") "123"
 f = {- generates a hint using hlint.yaml only -} map ((,) "a") "123"
+f = map (\s -> MkFoo s 0 s) ["a","b","c"]
 </TEST>
 -}