Not upheld: irresponsible lending and unfair overdraft charges complaint against Bank of Scotland plc (trading as Halifax)

Decision detail

Summary

Mr and Mrs R complained that Halifax allowed them to continue using three overdrafts that were unaffordable and unsustainable, causing continued financial difficulty. Halifax partially upheld the complaint and refunded charges from September 2005 to February 2018, but declined to refund charges from February 2018 onwards. Mr and Mrs R sought a full refund of all charges. The ombudsman found that Halifax's remedy was fair and reasonable because, although the overdrafts should not have been provided, Halifax offered appropriate assistance (repayment plans and facility termination) from May 2016 to February 2018, which Mr and Mrs R refused. The ombudsman concluded that Mr and Mrs R's choice to continue using the overdrafts rather than accept the offered solutions meant Halifax should not be held responsible for subsequent charges.

The Ombudsman's reasoning

The ombudsman accepted that Halifax should not have provided the overdrafts in the first place but focused on whether the remedy already offered was fair and reasonable. The ombudsman concluded that after Mr and Mrs R were offered appropriate forbearance measures (repayment plans and facility termination) from May 2016 to February 2018, which they refused, it would be unfair to require Halifax to refund charges beyond February 2018. The ombudsman reasoned that Mr and Mrs R chose to continue using the overdrafts rather than accept the assistance offered, and therefore Halifax should not be held responsible for charges incurred after they rejected viable solutions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website