Overdraft Unaffordable Lending Claims
If you were given an overdraft — or an overdraft limit increase — that you couldn’t realistically afford to repay, you may be entitled to a refund of the interest, fees and charges you’ve paid. Long-term overdraft use is one of the most common forms of unaffordable lending in the UK, yet also one of the most overlooked. This page explains how overdraft affordability claims work in the UK, which lenders we cover, and how to check your eligibility.
In this guide
- What counts as unaffordable overdraft lending?
- How an overdraft claim works
- Overdraft lenders we cover
- What might make an overdraft claim stronger
- How far back can you claim?
- What you might get back
- Frequently asked questions
- Related guides
- Our Partner's Fees Explained
- Check If You Could Be Owed Compensation
Check your agreements on Recoup, our claim partner’s site
What counts as unaffordable overdraft lending?
Under the Financial Conduct Authority’s rules — specifically CONC 5.2A on affordability and CONC 5C and CONC 5D on overdraft repeat use — a bank must carry out a reasonable and proportionate assessment of whether you can afford to repay an overdraft sustainably, and without falling into financial difficulty. They must also identify when an overdraft is being used repeatedly and offer help to anyone in that pattern.
Your overdraft may have been unaffordable if, at the time it was issued or your limit was increased:
- The bank didn’t properly check your income, expenditure or other commitments
- You were already in financial difficulty, missing payments or relying on other credit to service debts
- Repayments would have left you unable to meet essential living costs
- Your overdraft limit was repeatedly increased without a meaningful review
- You were overdrawn for most of every month for years, with the bank applying interest but offering no support
- The overdraft was issued despite clear signs of distress on your file — recent defaults, payday loans, missed mortgage or rent payments
- Your wages or benefits were going straight into your overdraft each month, with no realistic prospect of clearing it
If any of this sounds familiar, your case is worth checking.
How an overdraft claim works
The process is the same whether you complain yourself or use a claim partner:
- Eligibility check. A quick review of when the overdraft was opened, how long you’ve been overdrawn, and any signs the lending was unaffordable.
- Evidence gathering. Bank statements, account behaviour data and credit-file information are reviewed against the lender’s affordability obligations and the CONC 5D repeat-use rules.
- Complaint to the lender. A detailed, evidenced complaint goes to the bank. They have up to eight weeks to respond.
- Lender response. They may uphold, partially uphold, or reject the complaint.
- Escalation to the Financial Ombudsman, if needed. If the response is unsatisfactory, the case can be referred to the FOS, free of charge. FOS decisions are binding on the lender if accepted.
- Redress, if successful. Typical outcomes include a refund of interest and charges, 8% statutory interest on the refunded amount, and removal of adverse credit-file entries linked to the unaffordable overdraft.
For a step-by-step walk-through of the whole process, see our guide to how an unaffordable lending claim works.
Overdraft lenders we cover
We work with claim partners who handle complaints against most major UK banks and overdraft providers. Pick your bank to see specific guidance for that lender:
Major banks and high street lenders
- Barclays
- Halifax
- HSBC
- Lloyds
- NatWest
- RBS
- Santander
- TSB
- First Direct
- Bank of Scotland
- Virgin Money
- Nationwide
- The Co-operative Bank
Challenger and specialist banks
Legacy and closed brands
Even if your bank has been taken over, merged, or closed to new customers, historic overdraft claims are often still valid:
Don’t see your bank here? Most UK-issued overdrafts are eligible for review. Check your eligibility and we’ll let you know.
What might make an overdraft claim stronger
While every case turns on its own facts, certain patterns are particularly common in successful overdraft claims:
- Long-term reliance on the overdraft. Using your overdraft as effective monthly borrowing for years — your salary goes in, your bills go out, but you never get back into credit.
- Repeat-use patterns the bank ignored. Under CONC 5D, banks have a duty to identify customers in repeat use and offer help. Many don’t.
- Overdraft limit increases without meaningful review. The bank raised your limit based on internal scoring rather than checking whether you could actually afford the higher facility.
- Cross-product affordability gaps. The bank could see you were struggling with their credit cards or loans but still increased your overdraft.
- Long-term high utilisation. Being near or at your overdraft limit for months or years — a pattern the bank’s systems would have seen clearly.
If you recognise any of these on an overdraft you held, your case is worth a closer look.
How far back can you claim?
There is no fixed cut-off, but two time limits matter:
- The Limitation Act 1980 — generally six years from when the issue arose, though courts and the FOS take a flexible view depending on when you reasonably became aware
- The FOS time-limit rules — usually six years from the event, or three years from when you knew (or should have known) there was a problem
Overdraft claims are slightly different from one-off lending claims because the unaffordability builds up over time. The FOS often looks at the full history of the account, even where the original overdraft was opened many years ago, because the bank’s duty is ongoing — they should have been monitoring the account and acting on repeat-use patterns as they emerged. For a fuller breakdown, see how far back can I claim for unaffordable lending?
What you might get back
Overdraft redress, where a claim succeeds, typically includes:
- A refund of all interest, fees and charges applied to the overdraft from the point at which it became unaffordable
- 8% statutory interest added on top of the refunded amount, calculated from the date each charge was paid
- Removal of adverse credit-file entries linked to the unaffordable overdraft, including any default markers
- Adjustment or write-off of any outstanding overdraft balance — if you’re still overdrawn, the refund is usually applied against the balance first, with any surplus paid out to you
How redress is calculated is explained in detail in our guide on how unaffordable lending redress is calculated.
Frequently asked questions
Can I claim if I’ve already closed my bank account?
Yes. You can make an unaffordable lending complaint about an overdraft on an account that has been closed, paid off, or written off. The bank is still obliged to investigate the affordability of the original overdraft facility and any subsequent limit increases.
Can I claim if I’m still using my overdraft?
Yes. You can complain about any overdraft you hold or have held. If the claim succeeds and you’re still overdrawn, the refund is normally used to reduce the balance first.
What if my overdraft debt was sold to a debt collector?
If the bank sold your overdraft debt to a third-party collector, you can usually still complain to the original bank about the lending decision and the way the overdraft was managed. The complaint is about whether the lending was affordable when it was given, not about who currently owns the debt. If the claim succeeds and there’s still a balance with the debt collector, the redress is typically applied against that balance.
Will making a claim damage my credit file?
Making a complaint about an unaffordable overdraft should not damage your credit file. If your claim is successful, adverse markers linked to the unaffordable overdraft — including default markers — may be removed, which can improve your file.
Do I have to use a claims company?
No. You can complain directly to your bank free of charge. If you’re not happy with their response, you can refer the complaint to the Financial Ombudsman Service free of charge. If you’d prefer a regulated claim partner to handle the work, we can refer your case to one. The pros and cons are weighed up in our guide on whether you need a claims company.
Are there any fees if I use Claims Bible?
Claims Bible is an FCA-authorised introducer. We do not charge consumers a fee. If your case is referred to a claim partner and the claim succeeds, the claim partner charges a success fee — a percentage of the redress recovered, in line with the FCA’s fee cap rules. There is no fee if the claim is unsuccessful, and no upfront cost. Full fee details are provided before you sign anything. Read our fees page.
How long does an overdraft claim take?
The lender has up to eight weeks to issue a final response. If the case goes to the Financial Ombudsman, decisions can take several months depending on complexity and the FOS workload at the time. Our guide on how long an unaffordable lending claim takes has more detail.
Other types of unaffordable credit
Overdrafts are one of several credit products that can be reclaimed when they were unaffordable. If any of these apply to you, each is a separate potential claim:
- Unaffordable credit card claims
- Store and catalogue credit claims
- Doorstep loan claims
- Buy now, pay later claims
- Credit limit increase claims
- Guarantor loan claims
Related guides
- What is unaffordable lending?
- The CONC rules on affordability — a plain-English guide
- Do I have an unaffordable lending claim?
- How the Financial Ombudsman handles unaffordable lending complaints
- What evidence do I need for an unaffordable lending claim?
Check If You Could Be Owed Compensation
You may be eligible to complain if a lender gave you credit you couldn’t afford. Start a free check in minutes — no paperwork needed. No win, no fee if you choose to proceed.
