Bank of Scotland Overdraft Unaffordable Lending Claims

If you were given a Bank of Scotland overdraft — or had your overdraft limit increased — and you couldn't realistically afford the interest and charges, you may be entitled to a refund. Long-term overdraft use is one of the most common forms of unaffordable lending in the UK, and one of the most overlooked. This page explains how Bank of Scotland overdraft affordability claims work, what to look for in your account history, and how to check your eligibility.

In this guide

• About Bank of Scotland Overdrafts
• Was Your Bank of Scotland Overdraft Unaffordable?
• Common Patterns in Bank of Scotland Overdraft Claims
• What the Financial Ombudsman Data Shows
• How a Bank of Scotland Overdraft Claim Works
• How Far Back Can You Claim?
• Frequently Asked Questions
• Related Guides

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About Bank of Scotland Overdrafts

Bank of Scotland offers arranged overdrafts on its current accounts, charged as daily arranged overdraft interest on the amount you use, with a grace period until the end of the day to bring the account back into credit. Like other UK banks, Bank of Scotland moved to a single representative interest rate following the FCA's 2020 overdraft reforms, which abolished daily and monthly fees. Limits and rates vary based on individual circumstances.

Bank of Scotland plc is authorised and regulated by the Financial Conduct Authority under FRN 169628 and is part of Lloyds Banking Group — the same legal entity that stands behind the Halifax brand.

Was Your Bank of Scotland Overdraft Unaffordable?

Under the Financial Conduct Authority's rules — specifically CONC 5.2A on affordability and CONC 5C and CONC 5D on overdraft repeat use — Bank of Scotland must carry out a reasonable and proportionate assessment of whether you can afford to repay an overdraft sustainably, and without falling into financial difficulty. It must also identify when an overdraft is being used repeatedly and offer help to anyone in that pattern.

Your Bank of Scotland overdraft, or an increase to your limit, may have been unaffordable if, at the time it was granted or 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 cover essential costs
• Repaying the overdraft 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 extended despite clear signs of distress on your file — 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

Common Patterns in Bank of Scotland Overdraft Claims

The complaints that succeed against high-street banks tend to share the same shapes:

• Years of continuous overdraft use. The account never returned to credit for more than a day or two after payday, month after month, while interest kept being charged.
• Limit increases into an existing problem. The overdraft limit was raised — sometimes more than once — while the account already showed persistent reliance on the existing limit.
• Failure to identify and act on repeat use. Under CONC 5D, the bank had a duty to identify repeat use and offer support. The Financial Ombudsman has upheld complaints where banks did not.
• Interest charged through visible hardship. Returned direct debits, gambling transactions, or reliance on other high-cost credit visible on the account, with no intervention.

What the Financial Ombudsman Data Shows

The Financial Ombudsman Service publishes data on the complaints it receives about every regulated UK firm. According to the FOS's most recent published figures, in the second half of 2024 (July to December) the FOS received 2,399 new banking and credit complaints about Bank of Scotland plc. Across the wider banking and credit sector, complaints reached 109,155 in the same six-month period — a 76% rise on the previous year, driven largely by disputes over credit affordability and bank fraud.

Note: the FOS publishes complaint volumes by firm and sector, but doesn't break them down by individual product. The figure above covers all banking and credit complaints against Bank of Scotland plc — which also includes the Halifax brand — across overdrafts, credit cards, loans, fraud and account services, not overdraft complaints alone.

Source: Financial Ombudsman Service half-yearly complaints data, H1 2025.

How a Bank of Scotland Overdraft Claim Works

1. Eligibility check. Start with a free check of your agreements — no paperwork needed, the account history does the work.
2. Evidence gathering. Statements showing the pattern of overdraft use, the interest charged, and your financial circumstances at the time.
3. Complaint submitted to the bank. Bank of Scotland has eight weeks to respond.
4. Lender response. The bank may uphold the complaint, partially uphold it, or reject it.
5. 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.

Want a rough idea of the numbers first? Try our overdraft refund calculator.

How Far Back Can You Claim?

Two sets of rules 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

Because overdrafts are ongoing products rather than one-off loans, the relevant "event" is often the bank's continuing failure to intervene, which can bring long-running overdrafts within time even where they started more than six years ago. See how far back can I claim.

Frequently Asked Questions

Is a Bank of Scotland claim the same as a Halifax claim?

They are the same legal entity — Bank of Scotland plc — but different brands with separately branded accounts. Complain about the account you actually held. If you held accounts with both brands, each can be looked at on its own facts.

I'm still using the overdraft. Can I still complain?

Yes. If the complaint succeeds while you still owe on the overdraft, the refund reduces the balance first, and anything left is paid to you. See what if you still owe the lender money.

What could I get back?

Interest and charges from the point the bank should have stepped in, Ombudsman interest on top, and corrections to your credit file. Our overdraft refund calculator gives a rough estimate.

Related Guides

• Overdraft claims hub
• Overdraft refund calculator
• Halifax overdraft claims
• Lloyds overdraft claims
• The CONC rules on affordability

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.

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