Not upheld: irresponsible lending and unfair credit relationship complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mrs S complained that Halifax lent her an overdraft irresponsibly and charged excessive fees and charges. She had held a £200 overdraft limit since November 2005 which was closed in October 2017 with the balance repaid by November 2019. Mrs S complained formally on 11 July 2025, over seven years after the account closure. The ombudsman accepted jurisdiction to consider the complaint as an unfair credit relationship under s.140A Consumer Credit Act 1974, but found no remedy could be awarded because no charges or interest had been levied in the six years prior to the complaint, and applying Supreme Court guidance on limitation periods, Mrs S had knowledge of the facts by October 2017 at the latest.

The Ombudsman's reasoning

The ombudsman accepted jurisdiction to consider the complaint as an unfair credit relationship under s.140A Consumer Credit Act 1974. However, applying the Supreme Court's guidance in Smith v RBS that courts should be slow to remedy unfairness where a claimant delayed more than six years after knowing the facts, the ombudsman determined that even if the complaint were upheld, no remedy could be awarded. This is because Mrs S had knowledge of the facts by October 2017 at the latest, and no charges or interest were levied in the six years prior to her complaint on 11 July 2025 (i.e., from 11 July 2019 onwards). The account had no charges since 2017 and the balance was repaid in full by November 2019.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website