Not upheld: unfair overdraft charges and irresponsible lending complaint against TSB Bank Plc

Decision detail

Summary

Mr C complained to TSB in May 2025 about overdraft charges applied to his current account since November 2015, claiming they were excessive and unfair and caused ongoing financial difficulty. TSB partially upheld the complaint and refunded charges for May 2019 to December 2022, but Mr C sought full refund of all charges. The ombudsman found that charges prior to May 2019 were complained about too late (more than six years after application), and that from January 2023 onwards, Mr C was not in genuine financial difficulty as he had sufficient income, periods of credit balance, and discretionary spending patterns. The ombudsman upheld TSB's partial refund as fair and reasonable compensation and did not uphold the complaint for additional refunds.

The Ombudsman's reasoning

The ombudsman applied time limit rules and found that Mr C should have been aware of his cause to complain when charges were applied, as account statements made him aware of the charges and he knew they were causing him loss. For charges prior to May 2019, the complaint was made more than six years late with no exceptional circumstances. For January 2023 onwards, the ombudsman found Mr C was not in genuine financial difficulty as he had sufficient income, periods of credit balance, and was making discretionary spending choices. The ombudsman applied the Smith v RBS principle that courts are slow to remedy unfairness where a claimant delayed more than six years after knowing the facts. TSB's refund for May 2019 to December 2022 was already fair compensation for the six-year period prior to complaint.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website