Upheld: irresponsible lending and unfair overdraft charges complaint against Santander UK Plc
Financial Ombudsman decision DRN-6126840 of 2026-05-15T00:00:00+00:00. irresponsible lending and unfair overdraft charges complaint against Santander UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6126840 |
|---|---|
| Decision date | 2026-05-15T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | overdraft |
| Claim type | irresponsible lending and unfair overdraft charges |
| Outcome | Upheld |
| Remedy | Santander must rework Mrs C's overdraft balance to remove all interest, fees and charges applied from December 2023 onwards. If a balance remains, Santander should arrange a suitable repayment plan and record credit file information reflecting corrective action from December 2023. If removing charges eliminates the balance, any overpayment should be returned with 8% simple interest from the date made until settlement, and adverse credit file information should be removed. Santander may reduce the overdraft limit by the refund amount if appropriate. |
Summary
Mrs C complained that Santander continued to allow her to use an overdraft and charge fees despite her being in financial difficulty. Mrs C had contacted Santander to explain she was not working and in arrears on utility bills, making it difficult to pay overdraft charges. The ombudsman upheld the complaint, finding that by November 2023 Santander should have realised the overdraft was unsustainable based on Mrs C's circumstances and regulatory guidance on financial difficulty indicators. Santander was ordered to refund all interest, fees and charges from December 2023 onwards and arrange a suitable repayment plan for any remaining balance.
The Ombudsman's reasoning
The ombudsman found that prolonged and repeated overdraft usage, combined with Mrs C's explicit contact to Santander stating she was struggling and in arrears on priority bills, created an objective indication of financial difficulty under regulatory guidance. While initial steps like budget planners and fee refunds were reasonable first steps, Santander failed to take corrective action when Mrs C's behaviour did not change and she remained significantly overdrawn. By November 2023, Santander should have realised the overdraft was unsustainable and that Mrs C's lack of further contact was likely due to her circumstances rather than improved ability to pay. Continuing to allow overdraft usage and charge fees in these circumstances caused harm and worsened her problem.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,408 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website