Overdraft Complaints
You may be able to make a complaint if:
Your overdraft limit was increased to a level that may not have been affordable for you to repay
Your overdraft usage showed signs of potential financial difficulty, such as:
Being in your overdraft most or all of the time
Regularly using an unauthorised overdraft
Relying on your overdraft to cover everyday living costs
Lenders are expected to monitor how overdrafts are used and consider whether borrowing remains affordable and sustainable. If this may not have happened in your case, you may have grounds to make a complaint.
When you can complain
You can raise a complaint whether:
The account is still open and in use, or
The account has been closed
Overdraft Use and Financial Difficulty
Overdrafts are generally intended to help with short-term financial needs rather than long-term borrowing.
Banks are expected to monitor how overdrafts are used and consider whether borrowing remains affordable and appropriate for the customer’s circumstances.
If there are indications that a customer may be experiencing financial difficulty, the bank may be expected to review the account and consider appropriate support.
Persistent overdraft use
One indicator of potential financial difficulty can be persistent or continuous overdraft use.
Under the Lending Code, this was described 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.”
If you remained in your overdraft continuously for extended periods, or your overdraft limit was increased, this may be relevant when considering whether a complaint could be made.
Each case is assessed individually.
Do one or more of these situations apply to you?
Your overdraft limit may not have been affordable - Your overdraft limit may have been set at a level that was difficult to manage, or it may have been increased over time.
In some cases, an overdraft may initially be manageable, but later increases could make it harder to repay.
If there were indications of financial difficulty at the time, this may be relevant when considering whether a complaint could be made.
Your bank may not have recognised signs of financial difficulty - Overdrafts are generally intended for short-term borrowing rather than ongoing use over a long period.
Banks are expected to review overdraft usage and consider whether borrowing remains appropriate for the customer’s circumstances.
Possible indicators of financial difficulty
These may include:
Being in your overdraft most or all of the time over a prolonged period
Regularly exceeding your arranged overdraft limit
Payments such as direct debits or standing orders being returned unpaid
Increasing use of credit, including loans or credit cards
A worsening credit record, such as missed payments or defaults
Use of high-cost or short-term credit
Arrears on priority commitments such as a mortgage
Making payment arrangements with other creditors
If your overdraft borrowing continued or increased during a period where you may have been experiencing financial difficulty, this may be relevant when assessing whether a complaint could be made.
Each case is assessed individually.
Next step
If one or more of these situations apply to you, you may wish to consider making a complaint.
Check If You May Be Able To Make A Complaint
Complete our short form to see whether you may be able to make a complaint. This will not affect your credit score.
We’ll only use the information you provide to assess your eligibility and process your claim securely. Your details will never be shared with third parties, and you can opt out at any time. Providing your DOB and address helps us verify your claim and ensure the process is quick and accurate.