Upheld: irresponsible lending - unaffordable overdraft limit increase complaint against Nationwide Building Society
Financial Ombudsman decision DRN-5918681 of 2026-04-22T00:00:00+00:00. irresponsible lending - unaffordable overdraft limit increase complaint against Nationwide Building Society. Outcome: Upheld.
Decision detail
| Reference | DRN-5918681 |
|---|---|
| Decision date | 2026-04-22T00:00:00+00:00 |
| Firm | Nationwide Building Society |
| Product | Overdraft |
| Claim type | irresponsible lending - unaffordable overdraft limit increase |
| Outcome | Upheld |
| Remedy | Nationwide must rework Miss S's overdraft balance by removing all interest, fees and charges applied from September 2023 onwards. If a balance remains, Nationwide should arrange a suitable repayment plan and record negative information reflecting corrective action from September 2023. If removing charges results in no outstanding balance, any overpayment should be returned with 8% simple interest from the date paid until settlement, and adverse credit file information should be removed. Nationwide may reduce the overdraft limit by the refund amount if appropriate. |
Summary
Miss S complained that Nationwide unfairly provided her with an unaffordable overdraft and continued applying charges despite her financial difficulties. Nationwide increased her overdraft limit from £1,500.00 to £5,000.00 in September 2023. The ombudsman upheld the complaint, finding that Nationwide failed to conduct adequate affordability checks and had sufficient information from Miss S's account statements (including token creditor payments, a debt collection agency payment, and a failed HMRC payment of over £6,500.00) to question whether the facility was sustainable. The ombudsman ordered Nationwide to remove all interest, fees and charges applied from September 2023 onwards and arrange appropriate remedies depending on the resulting balance.
The Ombudsman's reasoning
Nationwide failed to carry out proportionate affordability checks before increasing the overdraft limit to £5,000.00. The firm had sufficient information from Miss S's account statements to question whether the facility was sustainable, including token payments to creditors, a debt collection agency payment, and a failed HMRC payment of over £6,500.00. Even accepting Miss S's stated annual income of £34,000.00, the £5,000.00 limit (more than double her monthly income) was unaffordable given clear signs of financial difficulty. The firm should have questioned whether even the existing overdraft limit remained sustainable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Nationwide Building Society, all decisions | 13,251 | 21% |
| Overdraft, all decisions | 3,791 | 24% |
Source
Read the original decision on the Financial Ombudsman Service website