Partially upheld: Irresponsible lending complaint against Santander UK Plc
Financial Ombudsman decision DRN-6143115 of 2026-07-02T00:00:00+00:00. Irresponsible lending complaint against Santander UK Plc. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6143115 |
|---|---|
| Decision date | 2026-07-02T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | Overdraft |
| Claim type | Irresponsible lending |
| Outcome | Partially upheld |
| Remedy | Santander must: (1) Re-work Mr S's overdraft balance to remove all interest, fees and charges applied from August 2022 onwards; (2) If a balance remains, contact Mr S to arrange a suitable repayment plan and may backdate negative credit file information to August 2022; (3) If removing charges results in no outstanding balance, treat any excess as overpayments and return to Mr S with 8% simple interest from the date made until settlement; (4) If no balance remains after adjustments, remove any adverse information from Mr S's credit file. |
Summary
Mr S complained that Santander provided him with an unaffordable overdraft from January 2022. The overdraft was increased to £5,000 in January 2022 when Mr S had earned income of approximately £400 per week and a long-standing pattern of heavy gambling. From February 2022 onwards, Mr S was constantly in overdraft using borrowed funds to gamble, and by August 2022 Santander identified signs of financial difficulty. The ombudsman upheld the complaint in part, finding that whilst the initial increases were reasonable, Santander should have monitored the account more proactively and taken unilateral action from August 2022 to reduce Mr S's overdraft reliance, rather than merely sending communications. Santander was ordered to remove all interest, fees and charges from August 2022 onwards and arrange appropriate repayment terms.
The Ombudsman's reasoning
The ombudsman found that whilst the initial overdraft increases in January 2022 were reasonable based on account turnover and credit checks at that time, Santander failed in its duty to monitor the account proactively thereafter. By August 2022, it was apparent that Mr S was using borrowed funds at levels far exceeding his regular earned income to fund heavy gambling activity, creating a situation where he was effectively locked into overdraft reliance with no realistic prospect of sustainable repayment. Although Santander sent multiple communications to Mr S, this was insufficient; Santander should have taken unilateral proactive action to reduce Mr S's overdraft reliance. The ombudsman rejected Santander's characterisation of gambling winnings as regular income and distinguished between legitimate risk-taking behaviour and actual financial distress, finding that the combination of heavy gambling funded by overdraft at levels exceeding earned income constituted a red flag requiring intervention.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,522 | 22% |
| Irresponsible lending, all decisions | 30,770 | 37% |
| Overdraft, all decisions | 3,703 | 24% |
Source
Read the original decision on the Financial Ombudsman Service website