We can look into an irresponsible lending complaint if:
your overdraft limit was 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.
You can complain if the account is still being used or if it is closed.
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”.
Do one or more of these reasons apply to you?
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 for example by stopping adding charges.
The bank should have seen you were in difficulty - 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. So at one of these reviews, your bank should have seen if you were in financial distress. For example, if you are in the overdraft for all (or almost all) of the month for a prolonged period. Or, if you were exceeding your arranged overdraft limit regularly for a significant amount.
Often having direct debits or standing orders not being paid / returned.
A lot of gambling showing on your statements.
Significantly increasing other debts with the same bank.
A worsening credit record – maxed out credit cards, new missed payments, defaults etc.
Using payday loans / high cost credit.
Increasing mortgage arrears.
Making payment arrangements with other creditors.
If you can answer yes, we can look into a potential claim for you.
Start Your Claim Now
Simply complete the contact form below or telephone 0800 246 1361
Please note, you do not need to use a claims management company to make your complaint to your lender(s), and if your complaint(s) is not successful, you can refer it to the Financial Ombudsman Service yourself for free.