Not upheld: irresponsible lending / unfair treatment of overdraft facility complaint against TSB Bank Plc

Decision detail

Summary

Mr P complained that TSB treated him unfairly by continuing to provide an overdraft facility after his financial position worsened from December 2022. TSB acknowledged Mr P was struggling from October 2023 and offered to refund all interest and charges from that point onwards. The ombudsman found this offer appropriate, as it represented approximately one year from when Mr P's difficulties began, which is in line with FOS expectations for firm intervention. TSB also provided forbearance measures including repayment plans. The complaint was not upheld, and the overdraft was fully repaid by May 2025.

The Ombudsman's reasoning

Firms have an ongoing obligation to monitor overdrafts and ensure suitability through regular reviews, typically annually. Mr P complained he started struggling in September 2022, and TSB's offer to refund interest and charges from October 2023 (approximately one year later) is in line with when the FOS would generally expect firms to take action. The refund offered is consistent with FOS standards for such circumstances. TSB also offered forbearance measures including repayment plans and income/expenditure assessments. No evidence suggested TSB lent irresponsibly or that the lending relationship was unfair under section 140A of the Consumer Credit Act 1974.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website