Not upheld: excessive overdraft charges and unfair limit reduction complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr L complained that Halifax charged excessive overdraft fees and unfairly reduced his £1,000 overdraft limit to £200 in June 2025. He claimed Halifax should have reviewed his overdraft earlier and offered a loan instead when he applied in 2008. The ombudsman considered the complaint under Section 140A of the Consumer Credit Act 1974 regarding unfair credit relationships. Examining account statements from November 2013, the ombudsman found Mr L's salary exceeded the overdraft limit and he cleared it monthly with no signs of financial difficulty, meaning Halifax had no obligation to intervene. The limit reduction was found to be fair and properly notified. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman considered whether Halifax's decision to allow Mr L to remain in overdraft and continue charging fees created an unfair relationship under Section 140A of the Consumer Credit Act 1974. Examining the account statements from November 2013, the ombudsman found that Mr L's salary exceeded the overdraft limit and he cleared it each month, with no visible signs of financial difficulty at annual reviews. The ombudsman concluded that Halifax was not obliged to intervene and that the subsequent limit reduction in June 2025 (after the account had been in credit for over a year) was fair and in accordance with the account terms and conditions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website