Partially upheld: irresponsible lending complaint against Santander UK Plc
Financial Ombudsman decision DRN-6178601 of 2026-05-12T00:00:00+00:00. irresponsible lending complaint against Santander UK Plc. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6178601 |
|---|---|
| Decision date | 2026-05-12T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | overdraft |
| Claim type | irresponsible lending |
| Outcome | Partially upheld |
| Remedy | Santander must re-work Mr R's overdraft balance to remove all additional interest, fees and charges applied from December 2024 onwards. If a balance remains, arrange a suitable repayment plan and backdate any negative credit file recording to December 2024. If removal of charges results in overpayments, return these to Mr R with 8% simple interest from the date made until settlement, and remove adverse credit file information if no balance remains. |
Summary
Mr R complained that Santander continued to provide an overdraft facility despite his financial difficulties following a £2,000 increase in July 2021. The ombudsman examined the period from July 2021 onwards and found that while initial checks were reasonable, by December 2024 Santander should have taken active steps to reduce Mr R's overdraft reliance. Evidence showed Mr R had breached his overdraft limit multiple times, had a returned direct debit, and contacted a debt recovery business, yet Santander only sent letters rather than actively intervening. The complaint was partially upheld, requiring Santander to remove all interest, fees and charges from December 2024 onwards and arrange appropriate repayment terms or return overpayments with interest.
The Ombudsman's reasoning
The ombudsman found that while initial checks for the graduate overdraft were reasonable, by December 2024 Santander had sufficient evidence of unsustainable overdraft reliance to require active intervention. The pattern of repeated limit breaches, returned payments, and declining buffer balances demonstrated Mr R was becoming 'locked in' to overdraft charges. Merely sending letters about usage was insufficient; Santander needed to take active steps to explore reduction options with Mr R or, if unsuccessful, reduce or remove the facility.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,445 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website