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.
These complaints do not hurt your credit record. And if the bank doesn’t make a you a good offer, it is free to take your case to the Ombudsman.
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.
A similar decision was reached in this Lloyds case:
Mr and Mrs C’s statements leading up to the renewal shows they hadn’t really had a credit balance on their account for a prolonged period. Indeed, they’d had regular returned payments and had also exceeded their limit. In these circumstances, it ought to have been apparent Mr and Mrs C were unlikely to be able to repay what they owed within a reasonable period with overdraft interest, fees and associated charges continuously being added.
Decide which reasons apply to your overdraft complaint
You are in the overdraft all or almost 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 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 a year is prolonged.
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.
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.
If you have paper statements or you can download them from the app, that may be useful for you. But you don’t need to send these 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 in the app or 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.
When the account is still open, you can send your complaint by secure message in the app or on the bank’s website. Take a copy of what you put in the message – you could email it to yourself so it won’t get lost and the date is recorded.
If you prefer to send this by email, here is my list of bank email addresses for complaints.
A template you can adapt
The section above looked at the reasons to complain and the other good points that apply to your case – you can turn those into a complaint.
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.
The bit about other points is important – what should your bank have noticed that showed you were in difficulty?
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.
START BY SAYING they should have noticed when your overdraft usage got worse
Overdrafts are meant for short-term borrowing but that was not what I was using the account for. 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 2020, although my salary took my account briefly into credit, within a few days, I was back in the overdraft.
other points that you can include if relevant- see the longer list above – these are just a few examples
You should have seen I was in financial difficulty because you rejected my loan application in 2019.
You should have noticed that the income going into my account decreased from 2017.
From 2020-22 there was a lot of gambling showing on my account.
In 2021 you should have seen from my credit record that I had made payment arrangements with other debts.
You should never have given me an account with such a large overdraft. When I applied in 2016, 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 in about 2016. When you increased the limit, you should have seen that my debts to other lenders on my credit record had increased a lot.
I do not know the exact months of the overdraft limit increases. In your reply to this complaint, please tell me when the increases were and how much the limit went up on each occasion.
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 2018 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 in a lot of different situations. For example:
- 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 (this is unusual), ask them to put the questions in writing as you find the phone difficult
- if 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
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.
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.
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 very 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 a bit 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.
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chloe says
hello, i raised a Halifax complaint on the 11th of march. i didn’t get a final response by the 8 week mark & received a text message from Halifax stating they’d extended it to the 3rd of june. so at this point i contacted FOS. (i probably should of just waited) as yesterday i’d received a phone call stating my complaint had been assigned and was being looked into & i should hear back within the next couple of days (if rejected). she said if the complaints being upheld i won’t hear from her again? is this because it’s with FOS? will they get the final response or will i get it sent to me aswell despite whatever outcome it is?
sorry if that’s a silly question!
thank you
Sara (Debt Camel) says
When a complaint is with FOS, a lender will normally send my offer to FOS and then FIS sends it to you and asks if you would like to accept it or do you want the FIS case to continue.
Sending a case to FOS doesnt slow it down!
chloe says
thank you.
the lady from Halifax called me today & said they’ve rejected my claim but are freezing interest & charges for 30 days and are going to pay £100 into my account to ‘help’ if i’m struggling.
so i guess i just need to wait for my complaint to be assigned to a case handler at FOS now.
James says
Hi!
After complaining in January and then going to the FOS. They have finally got back to me today with an offer to refund all overdraft charges since 2019. £1700!
this is without the FOS investigating. Do you think accepting the offer is a good idea or should I let the FOS investigate?
Thanks
Sara (Debt Camel) says
Which bank is this?
when did the overdraft start, and if this was originally a student account, when did the bank start charging interest?
James says
This is with Lloyds the offer got sent through the FOS. It was originally a student account and I believe the interest started in 2019
Sara (Debt Camel) says
In that case a refund form 2019 is a “full refund”.
Even if the interest started in 2018, you are getting very nearly all the interest back now. Unless you think the interest started years before, I doubt this is worth carrying on with. Good result!
Joanne says
Hi,
I have just complained to Natwest as I have been in my OD on/off since 2019 but the complaint is not being upheld.
My Complaint in bullet points:
Since 2019, the bank failed to recognise ongoing financial difficulty during annual overdraft reviews.
-Forbearance (e.g. stopping interest/charges) was not offered.
-Customer was constantly in overdraft, only able to pay minimum interest.
-In 2019, overdraft limit was increased without proper checks.
-Income was under £1,200/month; overdraft over £1,000—leading to immediate debt cycle.
-No income in 2020 due to unemployment, but this was not addressed.
-Overdraft was unaffordable and should not have been approved.
-Customer requests a refund of interest and charges from 2019 onward.
However, Natwest are not upholding the complaint. I really strongly believe that as a 20 year old (at the time) should not have been able to go into the bank and have my overdraft upped by £500 with little to no proof of income and given my financial history. They say they have emailed me etc but there hasn’t been any phone calls (real effort) made to discuss my OD with me. At least for the last year, my credit score has been poor (I know this isn’t sufficient reason) but I have had missed payment, including in 2019 and then one more recently. They even state that they have seen opportunity for the OD to be removed (likely the £80 my grandma sends me for my birthday). I don’t use this account as a main account anymore.
Sara (Debt Camel) says
I suggest you send the complaint to the ombudsman. use the link in the article above.
What other debts do you have at the moment? As you may be able to win complaints about them.
Joanne says
I have an overdraft with Monzo, which was given to me in Q3 last year – lord knows how I got a 1K OD when my credit score is low. Same goes with AMEX which I now have a repayment plan with NCO, not sure if I can do anything here and Paypal credit. Amex is the one that has caused me to go into financial difficulty now as the minimum payments were so high – how I got this credit card I do not know! I dont think I have a reason to complain about these.
Sara (Debt Camel) says
Why don’t you think you have a reason to complain about these? You say the Amex was the start of your difficulty…
Molly says
I made a complaint to several banks and have just received my biggest payout of over £7000 on overdrafts charges. I have also had lots of success with credit card and loans. Sara has been a great help and I would recommend her templates and support to everyone.
Siobhan says
I used the template exactly as it was, asking for a refund of charges back to 2017 due to it being unaffordable.
I got a refund of £2534 today straight in my bank!
Santander rang me twice and I missed it at work, then this arrived! Absolutely delighted 🤩
Jon says
Hi,
I have recently found your website via Instagram / TikTok – I have just sent a letter to Halifax, I am hoping I get a good result… I am 27 Y/O now and have been in my overdraft since I was 18… a £4,500 limit overdraft, so think I have paid well over £10,000 in fees alone… £4,500 overdraft on a £1,500 NET monthly salary (at peak, I was on £800 when I first applied/was approved for the overdraft!)
Really hoping I get a similar result to the above… I did however lie on the affordability / income/expenses thing when i was requesting for an overdraft, daft of me but will this be held against me? They obviously didn’t check because I was telling them I was earning £50,000… when it clearly showed I was being paid £1,500 a month
Sara (Debt Camel) says
A bank should have tried to verify your income if it could only see 1500 net a month – not many 18 year old earn 50k a year!
And anyway, they should have realised when they reviewed the account annually that it was unmanageably high for you
Amy says
For those of you who went to the financial ombudsman, how long did it take for a decision to be made once the case had been assigned?
I got an email from someone yesterday saying they have been assigned my case, asked me a few questions and I responded with all the relevant information. They got back to me today just to confirm they recieved all this information and said they are now awaiting information from Halifax, once they have received this they will be in touch. I’ve heard it can take months , I first went to the financial ombudsman about a month ago.
Jason says
Hi Sara,
Last year I commented that I had an overdraft affordability complaint with HSBC which was taken out in 2010. To keep it short, despite months and months of research and asking, HSBC continuously told me they had no data past 6 years (2017 at the time of complaint ). I luckily found old bank statements to send to FOS which were from 2014 so that was upheld in my favour however I couldn’t find anything from 2010-2014. AFTER acceptance of the outcome, it transpired that HSBC did in fact have vital information regarding my overdraft back to 2014, therefore, they most likely had it from 2010 but now complaint is settled, there’s nothing i can do about it. I made a complaint about this to adjudicator (HSBC purposely withholding and supplying information) and they’ve upheld it and HSBC have admitted to the failure. However they’re only offering £150 despite this being held from me has cost me potentially thousands in redress. Not just that but HSBC have admitted to providing ‘misleading’ and not being ‘transparent’ with me.
The adjudicator doesnt think i will be awarded any more money than this from HSBC even if it goes to FOS but seeing as they gave me £400 compensation just for not sending DSAR in time, I find this hard to believe? Also, they’ve purposely withheld evidence from me?! Could I just get your thoughts on this please? Thank you
Sara (Debt Camel) says
The adjudicator doesnt think i will be awarded any more money than this from HSBC even if it goes to FOS
What adjudicator is this? At HSBC or the Ombudsman?
Jason says
Sorry, the adjudicator at the Ombudsman said this.
Sara (Debt Camel) says
How was it found out that had this older information?
Jason says
HSBC haven’t given any explanation as to how it was found but during the original affordability complaint they repeatedly told me that they could only go back 6 or 7 years. This was the customer service and complaints team. I then wrote to the data protection team and and they sent a letter back saying the same thing. It was only when I went through an old phone I found bank statements from 2014 which then helped me get the complaint upheld.
The FOS dealing with the complaint even said that it’ll be hard for HSBC to determine redress as they’ve said they have no access to information from before 2017. Then, somehow, the FOS came back to me with a redress figure and I asked them how HSBC had worked that out. She then sent me a screenshot of what she had been given from HSBC and it was from a system with all the fees and interest I had paid over those years.
I’ve asked but nobody has told me where that’s come from, except HSBC have admitted that they did have that information all along.
Sara (Debt Camel) says
So this happened while your previous complaint was ongoing?
Angela says
I was considering making an affordability complaint about an overdraft on a bank account that was closed. I have been in a protected trust deed (Scotland) since the account was closed – can I still complain?
Sara (Debt Camel) says
You can complain, but any refund will be paid into the Trust Deed and not to you. And this won’t normally reduce your TD payments or end it earlier… unless you are Close to repaying the debts in the TD in full, which is unusual.
So this is hardly ever worth bothering with
Nicole says
Hi Sara,
I made an affordability complaint following your template for an overdraft I have with Santander on 2nd April ‘25 when my overdraft was at £1200. They acknowledged the complaint pretty quickly, since then they have emailed on the 29th April apologising that it is taking them longer than anticipated to look into and that they hope to resolve within the next 4 weeks. I sent a message within my online banking chat exactly a week ago asking for an update on my complaint as it was approaching the 8 week deadline. They replied saying that it was with a complaints investigator and that it has to be looked at thoroughly before they come back to me with an outcome. I have received an email today (27th May) apologising again that it is 8 weeks today since I made the complaint and that they are still looking into it and will come back to me as soon as possible and if I don’t want to wait I can contact FOS but it also says we hope you’ll give us the opportunity to complete our review before doing so. My question is do I give them more time and if so how long should I give before referring to FOS? I just would like to have an answer either way now, I know these things time but it’s making me feel on edge.
Sara (Debt Camel) says
You could decide to give them a few more weeks as they seem to make reasonable offers sometimes- they still refuse good claims but not all of them.