Have you had big overdraft problems for a long period?
You can make an affordability complaint and ask for a refund of overdraft charges if:
- your overdraft limit was set too high at the start or increased to a level you are unable to clear; or
- your overdraft usage showed you were in long-term financial distress. For example, being in the overdraft all the time, or using an unauthorised overdraft a lot
- your overdraft was originally a student account with no charges, but now interest is being added and you are in the account all or almost all of every month.
This article shows how to make an affordability complaint to your bank, with a free template letter to use. If the bank doesn’t make a you a good offer, it is free to take your case to the Ombudsman.
These complaints do not hurt your credit record. And
Contents
Overdraft affordability complaints
Overdrafts are supposed to be for short-term borrowing
Overdrafts are intended to be used for short-term problems, not as long-term borrowing. A bank should review a customer’s repayment record and overdraft limit and if there are signs of financial difficulty, offer help.
One sign of financial difficulty is hardcore borrowing for a long period. The Lending Code defined hardcore borrowings as “the position where a customer’s current account overdraft remains persistently overdrawn for more than a month without returning to credit during that period”.
Some Ombudsman decisions
All cases are very individual. But these examples give you an indication of what the Ombudsman thinks is important.
In this NatWest decision, the Ombudsman decided:
NatWest did have an obligation to monitor Miss K’s use of her overdraft facility.
Any fair and reasonable monitoring of Miss K’s overdraft facility would have resulted in NatWest being aware Miss K was in financial difficulty … by October 2014 at the absolute latest. So NatWest ought to have exercised forbearance from this point onwards.
In this Santander case, the bank didn’t notice hardcore borrowing:
By this point, Miss C was hardcore borrowing. In other, words she hadn’t seen or maintained a credit balance for an extended period of time. Santander’s own literature suggests that overdrafts are for unforeseen emergency borrowing not prolonged day-to-day expenditure. So I think that Miss C’s overdraft usage should have prompted Santander to have realised that Miss C wasn’t using her overdraft as intended and shouldn’t have continued offering it on the same terms.
Decide which reasons apply to your overdraft complaint
In the overdraft all, or almost all, of the month for a long while
This is the most common reason for winning a complaint
Overdrafts are meant to be used when you have a short term problem. Using the overdraft a lot for a few months is fine. Or for a few days at the end of a month before you are paid.
Banks should review your overdraft annually. This is in most overdraft terms and conditions. And even if it isn’t, the Ombudsman says this is good industry practice.
So at one of these reviews, your bank should have seen if you were in difficulty with the overdraft. For example if you are in the overdraft for all (or almost all) of the month for a prolonged period. Or if you were often exceeding your arranged overdraft limit.
I would say over 18 months or 2 years is prolonged borrowing, not short term.
The bank set your limit too high
This may have been from the start when you were first given an overdraft. Or the initial low limit may have been fine, then the bank increased it to a level which it was impossible for you to repay.
If the bank saw signs of financial difficulty, it should not have increased your credit limit, even if you asked for it. And it should have considered offering your help instead (the regulator’s word is forbearance), for example by stopping charges.
But what is too high?
This depends on your income and expenses. An overdraft of £2,000 for someone whose income is £1,800 a month is a lot – but if you earn £5,000 a month, then a £2,000 overdraft may be reasonable.
Other points that help a complaint
You won’t win an affordability complaint by saying the charges were too high.
Instead, you say the bank should have known they were unaffordable for you because of all the financial problems it could see on your statements and your credit record.
Here is a checklist, do any apply to you?
- often having direct debits or standing orders not being paid;
- a lot of gambling showing on your statements;
- significantly increasing other debts with the same bank (you may also be able to complain about those loans or credit card);
- being recently rejected for a loan or a credit card by the bank;
- significantly increasing debts with other lenders showing on your credit record;
- a worsening credit record – maxed out credit cards, new missed payments, payment arrangements, defaults etc;
- using payday loans;
- mortgage arrears;
- a reduction in the income going into your account.
Free student overdrafts
You can only win a complaint about these after the bank has started charging you interest
Making your complaint
What you need at the start
You don’t need to know the dates your limit was increased before complaining, my template asks for them.
You don’t need to send statements to the bank with your complaint – the bank already has them!
You can’t go back and see exactly what your credit score was in say 2021 when the bank increased your limit. But your current credit record shows what was happening back six years, so download your credit report now and keep it. The sooner you get the report, the further back it goes. I suggest you get your free TransUnion statutory credit report.
Send a complaint by email
I don’t recommend phoning to start off a complaint. It’s too complicated and you will be talking to someone that doesn’t specialise in these complaints.
I think email is the simplest way to make these complaints. Here is my list of bank email addresses for complaints.
An alternative is to send a long message in the app. But if this means using a chat facility, it’s not usually a good idea, as you are again talking to someone who doesn’t understand what you are saying and tries to tell you what help is available with your overdraft – when all you want is to have your complaint considered.
A template you can adapt
In the template below, I’ve invented some examples and dates so you can see how a complaint email could read. The bits in italics should be changed or deleted to tell your story. Delete dates if you don’t know them. If a sentence doesn’t sound relevant, delete it.
I am making an affordability complaint about the overdraft on my current account number 98765432.
Your identity details (these are needed if you complain by email, not if you use secure message):
My name is xxxxx xxxxxxxx. My date of birth is dd/mm/yy. The email address I use/used for this account was myaddress@whatever.com.
Your home address (if you know the bank has your current address, ignore this):
My current address is xxxxxxxxxxxxxxxxxxxx. Please do not send any letters to older addresses you may have on your records.
If your overdraft was originally a student overdraft with no interest include this, otherwise delete it:
My account started as a student overdraft and no fees were charged. I am complaining about the period after, when you started to charge fees.
START BY SAYING they should have noticed your financial difficulty
Overdrafts are meant for short-term borrowing but you could see I was unable to clear the balance in a sustainable way. I was using the account for long term borrowing as I could not get out of this. The fees and charges you were adding were making my position worse.
I am complaining that [every year since [20xx] OR for many years] you have failed to notice my difficulty during the annual reviews of my overdraft. You should have offered forbearance eg by stopping interest and charges being added.
By 2017 I had been in my overdraft constantly for many months, not getting back into the black even when I was paid. This “hardcore borrowing” is a clear sign of financial difficulty. My income was only £1,850 a month – after I had paid bills, there was no way I could hope to clear an overdraft of £3500 in a reasonable length of time.
OR
By 2021, although my salary took my account briefly into credit, within a few days, I was back in the overdraft.
include any other points that show you were in difficulty
You should have seen that I was in financial difficulty because you rejected my loan application in 2021.
You should have noticed that the income going into my account decreased from 2020.
From 2020-22 there was a lot of gambling showing on my account.
In 2022 and 2023 there were a lot of rejected direct debits on my account.
… or anything else!
Say if the initial limit was too high or it was increased too high
You should never have given me an account with such a large overdraft. When I applied, you should have checked my credit record and income and seen I had recently missed payments to a credit card and had taken several payday loans.
OR
You should not have increased my overdraft limit. When you increased the limit, you should have seen that my debts to other lenders on my credit record had increased a lot
OR (for accounts that had been student accounts)
You should have seen after [2020] when you started charging interest that the limit was too high to be repayable on my income.
In your reply to this complaint, please tell me when any limit increases were and how much the limit went up.
END BY asking for a refund of charges and interest:
I would like you to refund all the interest and charges that were added to my account from 2016 when you increased my overdraft limit.
OR
I would like you to refund all the interest and charges that were added to my account from 2021 when you should have realised that my finances had got worse to the point that I was no longer able to clear the overdraft.
Please remove any late payment and default markers from my credit records.
Points to note
Student overdrafts
You won’t win a complaint about a student overdraft saying you were a student and it was unaffordable at that point.
But when the bank has started charging interest, it should start doing reviews and check if you are in difficulty. So from then on, you can win affordability complaints.
You can complain if the account is still being used or if it is closed
These complaints can be made if:
- you are still using the account or you have stopped using it and are paying it off;
- the account has been closed;
- the bank defaulted it and sold it to a debt collector (here you still complain to the bank, not the debt collector). If the debt collector has gone to court and got a CCJ, add a sentence to the template saying you want the CCJ removed as part of the settlement of your complaint.
But if you have had an IVA or bankruptcy after these problems, or if you are still in a DRO, then you shouldn’t complain – ask in the comments below for details.
Old accounts
Banks may say FOS won’t look at an old complaint, but this isn’t right. FOS will often look at a complaint if it has been open in the last six years. How far back FOS will go seems rather random, but it should be possible to go back at least 6 years.
Open and recently closed accounts aren’t a problem – the bank will still have your statements.
If your complaint is about an account that was closed more than 6 years ago, it’s going to be very hard to win.
Packaged bank accounts
These affordability complaints are not about the fees on packaged bank accounts. MSE has a page about packaged bank account charge complaints.
Personal accounts, not business accounts
The complaints covered here relate to personal accounts. For business accounts, talk to Business Debtline about your options.
The Bank replies
They want to phone me!
People are often scared if they get this message. But it may be good news! You can just ignore it or say you would like a reply in writing.
If you decide to take the call, it helps to be prepared:
- have a pen and paper handy so you can write down anything
- if they say they are partially upholding the complaint, ask them the date they are refunding the fees from, and how much. And say you would like to see this in writing before you decide whether to accept it.
- if they ask you questions that sound complicated or worrying, ask them to put the questions in writing as you find the phone difficult
- when they say they are rejecting the complaint, ask for this in writing, as you will be going to the Ombudsman.
Rejection/poor offer – go to the Ombudsman , it’s free
Banks reject many good complaints, hoping you will give up. So don’t! You know if the overdraft has caused you a lot of problems.
You can’t go straight to the Financial Ombudsman (FOS), you have to wait for the bank to reply, or for them to have not replied within 8 weeks.
Here are some things banks may say to try to put you off:
- you could have declined the increase to your overdraft limit – FOS probably won’t think that is a good reason
- you never let the bank know you were in difficulty – FOS probably won’t think that is a good reason
- your salary was enough to return you to credit each month – this is misleading if bills meant you soon went into the overdraft;
- FOS will not look into things that happened more than 6 years ago – if your account was still open in the last 6 years FOS may well look at it.
And the bank may offer to refund fees for the last 15 months say, even though your problems have been large for many years. Think twice about accepting a low offer – you won’t put this offer at risk by going to the Ombudsman.
If you are offered a refund for the last 6 years but not any further back, have a think if this is a good enough offer. It is unpredictable whether the ombudsman will be prepared to go back further than 6 years.
If you aren’t sure, post in the comments below.
To send the case to FOS, complete this online form:
- you can use what you put in your complaint to the bank;
- if the bank rejected your complaint or made a low offer, say why you think this is unfair;
- use normal English, not legal terms.
You don’t need to send your bank statements – the bank will send those to FOS. And you don’t need the policy documents for your bank account, the lender will supply those to FOS if they are needed.
Do these complaints work?
Yes! From 2024, some banks are making more offers directly.
A Guardian article featured a case where someone used the template letter here. Barclays denied it had done anything but made an £8,000 “goodwill” payment to the customer.
And if your bank rejects your case, people are winning cases at the ombudsman. FOS is a friendly service although it isn’t speedy. It isn’t faster to use a solicitor or a claims firm,
The comments below this article are from other people who have made this sort of complaint. That is a good place to ask for help if you aren’t sure what to do.
Is your credit card limit too high?
Refunds from unaffordable loans
Unaffordable car finance – your options
Nisha jackson says
Hi, I raised an affordability complaint for an overdraft with TSB emailing the point of contact from you list of contacts on this site on 22nd August and also raised a complaint through there website but still haven’t received an acknowledgment. How long does it usually take to have a response or acknowledgment? Thanks
Sara (Debt Camel) says
I don’t think they normally send a quick acknowledgement. You could phone up and ask them to confirm they have the complaint?
Nisha jackson says
Ok, how long would you usually leave it before escalating? Thanks
Sara (Debt Camel) says
I would phone them now, it’s been a month. You cant go to the Ombudsman until it has been8 weeks
Josie says
Hi, I raised a complaint on the 13th of August and received a letter to confirm acknowledgement a few days later so it would be worth ringing them. I have yet to receive a formal response to the complaint – it’ll be 8 weeks on the 8th of October.
Livvy says
I used the template for Nationwide and within a month I just received a random cheque in the post for £1900 but not saying anything about an outcome or how they got to this amount, which I found rather strange but obviously great to receive the cheque, however makes me think why have they just settle at this number without any context. I have just emailed NatWest with a similar email and 2 days later I’ve received a text saying my
Complaint is resolved and that they’ve sent me an email or a letter. No email received so will wait for the post but im expecting this to be a no most likely as it was “resolved” in less than 2 working days!
Sara (Debt Camel) says
had the Nationwide account been closed already? how long ago? Do you feel 1900 was a good refund?
Natwest seem to now be rejecting 98% of complaints almost immediately. Send this straight to the ombudsman when you get the letter.
Eleanor says
Has anyone heard from Halifax? Complained in June and kept getting messages saying it was going to be August and then September that they’d hear from me and I haven’t so I’ve complained to FOS, how long is this taking?
Sara (Debt Camel) says
send this to the Ombudsman now!
Louise says
I complained in May. Still not heard!
Sara (Debt Camel) says
send that to the Ombudsman too!
Zoe says
Just chipping in with another Halifax comment so others see the timeline – I complained to Halifax on June 22nd and don’t think it’s even been allocated yet – all I’ve had is ‘sorry we are taking longer than we would like to resolve your complaint’ – I sent it to the ombudsman at the 8 week mark around the end of August- they have been good at keeping in touch and have given me a case reference number and access to the online portal already . In the meantime I’ve been reducing the OD slightly each month on payday.
Kendall says
It has been 8 weeks and my bank have acknowledged my complaint they have just apologised for the fact that they haven’t come at me with a final response so I am unsure what to do next. Should I wait for their final response before going directly to the ombudsman? They are still charging me daily interest each day that goes by. I’m not sure what will benefit my case more
Sara (Debt Camel) says
which bank is this?
Simon says
How long have people found they are waiting for a reply from Lloyds. I recieved a text the day after but not heard anything since. It’s been just over 3 weeks now.
Sara (Debt Camel) says
They have a big overdraft backlog. Yopu will not get a responses before 8 weeks and its unlikely even then, they will probably ask for more time.
Are you in financial difficulty? Have you made any other affordability complaints because often an overdraft problem is a symptom of a bigger debt problem?
Simon says
I’m coping at the moment.
Although they have not responded to my complaint. I received correspondence from them today regarding my OD. They are going to reduce my interest for 6 months. At the same time they will reduce my limit on my overdraft by £20 which is roughly the saving in interest. I assume they have done this due to the complaint and shows they feel the OD is unaffordable.
Sara (Debt Camel) says
Well possibly. Or it could be a coincidence. I wouldn’t read too much into it.
Jamie says
I sent my complaint over in May. Lloyd’s still not even assigned it yet. Ombudsman involved but they are struggling to get info from Lloyds. How long do you think this will take to resolve?
Sara (Debt Camel) says
it could be a while yet! I have literally no information.
Are you in financial difficulty at the moment? Have you made any other affordability complaints?
jamie says
no i have not made any other complaints so i’m just riding this one out. It seems Lloyds have there hands full with these type of complaints
Matt says
What identity details are eequired when making a complaint?
Sara (Debt Camel) says
if you still have the account open, usually none. If its an old account, provide your full name and date of birth and address when you had the account
Ellie says
I have raised a large overdraft complaint to HSBC – i closed my account in 2021 but they agreed an overdraft facility of £5,000 between 2014 and 2018.
They have responded saying:
My investigation now focuses on the management of the facility during the last six-years, as I’m unable to review anything prior to this.
Turning to your comments about us failing to identify the financial difficulties, I can see there was non-essential spending on the account, which is not indicative of financial difficulties, and if this had been reduced, you could have considered reducing or repaying the overdraft.
We’ve wrote to you a number of times in 2020 and 2021, as we identified you as a repeat overdraft user. We explained the usage of the facility was higher than we would like it to be, and we asked you to contact us to discuss the support we may have been able to offer. Regrettably, you didn’t engage with us at first.
If the decision is to renew the limit we don’t contact the customer. We will not reduce or remove the overdraft if doing so would put the customer in financial difficulty.
is it worth me continuing with the ombusdman? They allowed me to be in my overdraft constantly and I only came out of it when I paid the money back.
Sara (Debt Camel) says
how did you clear the overdraft in the end?
Ellie says
My parents lent me money
Sara (Debt Camel) says
Borrowing from parents to clear the overdraft doesn’t make the overdraft affordable.
I think you should send this to the Ombudsman. Use the FOS online form, link in the article above.
Ellie Peett says
they are saying my statements won’t go that far back, so i need to send statements to the ombudsman?
Sara (Debt Camel) says
do you have statements going back a long way? if not it may only be possible to go back 6 years
Josie says
Hi Sara,
I complained to TSB about my overdraft, that the increased limit to £3000 in Dec 2021 was unaffordable and that they’ve failed to notice my difficulties ever since ie I’ve always been well into my overdraft. I asked for a refund of all interest and charges since Dec 2021. I’ve received a letter outlining that they are partially upholding my complaint. They are closing my overdraft facility and refunding charges applied since July 2023. This won’t cover the entire overdraft. They don’t outline why only from July 2023. Should I contact them and ask why only since July 2023? Or wait to review my own statements which I have requested through FOI. I’d like to escalate to the FOS – do you think this is worth it. In their letter they outline that they can look at the complaint again and that if I’m still unhappy I can refer ‘point 2’ to the FOS – does this mean I can only refer the fact that they failed to recognise my difficulties to the FOS and not them lending irresponsibly? And finally, I think in some of the comments above you have advised opening a new bank account for bills etc… when a complaint doesn’t clear the full amount of an overdraft which I’ve been looking at doing as I doubt this will be further resolved before the 20th of October when my overdraft facility will be removed.
Many thanks again for all of you help.
Sara (Debt Camel) says
what was this “point 2”?
yes it is sensible to switch your wages and bill payments to a new bank account now. Don’t wait for any further discussions.
Josie says
Point 2 that I made in my letter was they didn’t recognise I was experiencing difficulty during my reviews. Does this mean I can’t complain about point 1 being that they shouldn’t have increased my limit just because they think it was affordable?
Sara (Debt Camel) says
Just send this to FOS and say your situation had not got worse in July 23, your overdraft usage was heavy and consistent from well before that and TSB have not explained why they picked this date
Kirstin says
Sent a complaint to Bank of Scotland at the start of September (still unresolved – they’re looking into it), but couldn’t believe my eyes when I saw a text from them to say that extending my arranged overdraft could provide a little buffer to help see me through to payday, subject to approval! They’ve never sent this to me before, and I’ve been in OD for years. Can’t make this up!
Sara (Debt Camel) says
Very poor…
Nat says
Hello Sara,
I started off with a student overdraft with NatWest 25 years ago, at £1000 raising to £2000 and have been using it for all this time Do you know what to claim?
Sara (Debt Camel) says
How many days of the month are you typically in the overdraft? How long has it been like this?
Nat says
For all of the month with a few exceptions. It’s been like this for 20 years.
Sara (Debt Camel) says
Then this is a good claim. Expect Natwest to reject it and send it to the Ombudsman. the most common decision from the Ombudsman about such old complaints seems at the moment o be that you should get a refund for the last 6 years, but that would be helpful and clear the overdraft I expect?
Tegan says
If you raise a complaint like this are you unable to take out any future overdrafts?
Sara (Debt Camel) says
I suggest leaving it a few years before applying to that same bank for an overdraft! Other banks (not in the same banking group) don’t know what complaints you have made.
Liam says
Lloyds have gone past 8 weeks, and then extended to 30th September. Today I received this message
we’re sorry we haven’t resolved your complaint. We’re doing everything we can to fix this. Your reference number is #####. If you need to speak to us, please call #####
Already with the FOS. Is that normal for them to go past the extension and then be so generic about “fixing” this.. is this a bad sign?
Sara (Debt Camel) says
They are routinely missing the 8 week deadline nd then the later ones they say they hope to reply by. This is an automated message, no one has looked at your case or is working on “fixing it”.
Liam says
Does this work in my favour in any way? Would the ombudsman take into consideration poor complaint handling on top of irresponsible lending claim?
Sara (Debt Camel) says
Not really. Lloyds may offer you a small amount extra, but it has no real impact on the question of whether the overdraft was or was not affordable
Bc says
Just to update regarding the Halifax overdraft complaint sent to them 16th June, despite a few calls and getting no update, I tried via the app today on their messaging, when I asked for an update the auto bot asked if it was a new complaint – no, has it been over 8 weeks – yes, you have the right to forward to FOS – already sent it, then passed to an advisor who checked with the complaints department and it’s still not allocated to a account manager, the advisor said she’d escalate it but not holding out any hope, FOS are waiting for the final response letter before they can start with it. Looks like it is going to be a very long time for any outcome.
Rebecca says
Im in the same boat, complained at the of May, im actually not even getting automated updates from them anymore with a expected new date to resolve. They must be completely inundated, when you call they really have no other info other than its been picked up or it hasn’t.
Some sort of timeliness would be helpful at this stage
Good Luck
Rebecca
Bc says
Yes I fully understand the annoyance, I’m no longer getting the text messages either, I’ve already emailed them twice and told the advisor on the app that I wanted email contact with the final response letter, but they are completely ignoring the emails as well, just a pity they are not as slow when I have been overdrawn, they’re very quick with the text message.
Wishing you good luck too.
Rebecca says
Weird. Today I noticed Halifax have randomly stopped charging interest on my overdraft. I contacted them and they cannot tell me why apparently. Still waiting on a final response but this is new.
Sara (Debt Camel) says
See L’s comment today saying the same thing
Katie says
Thank you so much for your irresponsible lending complaint templates! I took overdafts and credit cards out whilst not well off financially and manic (I have bipolar disorder). Monzo have just sent me £2364 and apologised. It’s such a huge relief!
L says
Interesting. I sent a complaint to Halifax on May 17th and as yet I’m still to get a final response. I have forwarded this to the ombudsman and they are waiting for their response to start.
Today I logged into my bank and as of two days ago they have stopped charging interest on my overdraft. Anyone had this?
Sara (Debt Camel) says
I will be interested to see what others say.
Personally I think if they cant respond to a complaint in 8 weeks they should freeze interest until they do… but that;s my own view and not part of the rules