Partially upheld: irresponsible lending and failure to act on signs of financial difficulty complaint against Nationwide Building Society
Financial Ombudsman decision DRN-5995856 of 2026-05-18T00:00:00+00:00. irresponsible lending and failure to act on signs of financial difficulty complaint against Nationwide Building Society. Outcome: Partially upheld.
Decision detail
| Reference | DRN-5995856 |
|---|---|
| Decision date | 2026-05-18T00:00:00+00:00 |
| Firm | Nationwide Building Society |
| Product | Overdraft |
| Claim type | irresponsible lending and failure to act on signs of financial difficulty |
| Outcome | Partially upheld |
| Remedy | Nationwide must: (1) Re-work Mr O's overdraft balance to remove all additional interest, fees and charges applied from 4 February 2025 onwards; (2) If a balance remains, contact Mr O to arrange a suitable repayment plan and may backdate negative credit file information to 4 February 2025; (3) If removing charges results in overpayments, return these to Mr O with 8% simple interest from the date made until settlement, and remove adverse credit file information if no balance remains. |
Summary
Mr O complained that Nationwide Building Society was irresponsible in increasing his overdraft limit to £5,000 in February 2020. The ombudsman found the initial increase was reasonable based on available information at that time. However, by February 2025, Mr O had become heavily reliant on the overdraft for five consecutive months with income insufficient to bring the account into credit, including gambling transactions. Nationwide failed to act proactively to help Mr O reduce his reliance despite six-monthly reviews that should have revealed the financial difficulty. The ombudsman upheld the complaint in part and ordered Nationwide to remove all interest, fees and charges from 4 February 2025 onwards and arrange a suitable repayment plan.
The Ombudsman's reasoning
The ombudsman found that while the initial checks before the February 2020 increase to £5,000 were reasonable and proportionate, Nationwide failed in its duty to act proactively when clear signs of financial difficulty emerged by February 2025. By that date, Mr O had become increasingly reliant on the overdraft with no prospect of recovery, and Nationwide should have taken active steps to help reduce and remove the reliance rather than simply asking Mr O to contact the collections team. The gesture of goodwill refund was insufficient redress.
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