Partially upheld: irresponsible lending - unaffordable overdraft increases complaint against Bank of Scotland plc, trading as Halifax
Financial Ombudsman decision DRN-6231093 of 2026-04-10T00:00:00+00:00. irresponsible lending - unaffordable overdraft increases complaint against Bank of Scotland plc, trading as Halifax. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6231093 |
|---|---|
| Decision date | 2026-04-10T00:00:00+00:00 |
| Firm | Bank of Scotland plc, trading as Halifax |
| Product | overdraft |
| Claim type | irresponsible lending - unaffordable overdraft increases |
| Outcome | Partially upheld |
| Remedy | Halifax must re-work Miss P's overdraft balance by removing all interest, fees and charges for balances above £2,000 from 8 January 2024 onwards. If an outstanding balance remains, Halifax should arrange a suitable repayment plan and may record negative information on the credit file backdated to 8 January 2024. If removing charges results in no outstanding balance, any overpayments should be returned to Miss P with 8% simple interest from the date made until settlement. If no outstanding balance remains after adjustments, Halifax should remove any adverse information from Miss P's credit file. |
Summary
Miss P complained that Halifax provided her with an overdraft and 24 increases that were unaffordable. The overdraft grew from £300 in July 2022 to £2,100 by January 2024. While the initial overdraft appeared reasonable, from November 2023 Miss P showed clear signs of financial difficulty, remaining in her overdraft constantly and unable to clear the balance with her salary. The ombudsman upheld the complaint in part, finding that Halifax should not have increased the limit after 8 January 2024 and should have intervened earlier. Halifax must remove interest, fees and charges for balances above £2,000 from that date onwards and arrange a repayment plan for any remaining balance.
The Ombudsman's reasoning
The initial overdraft of £300 in July 2022 appeared reasonable given Miss P's income and account management at that time. However, Halifax failed to take appropriate action when clear signs of financial difficulty emerged from November 2023 onwards. The high volume of increase applications, combined with Miss P's inability to clear the overdraft balance each month and her eventual constant overdraft usage, should have prompted Halifax to contact her and seek to reduce her reliance on the facility. The letters sent in April 2024, October 2024, and May 2025 came too late and were insufficient. By January 2024 at the latest, Halifax should have ensured Miss P took measurable steps to reduce her overdraft reliance.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Bank of Scotland plc, trading as Halifax, all decisions | 117 | 8% |
Source
Read the original decision on the Financial Ombudsman Service website