Upheld: irresponsible lending and unfair application of charges complaint against Santander UK Plc
Financial Ombudsman decision DRN-6342986 of 2026-05-21T00:00:00+00:00. irresponsible lending and unfair application of charges complaint against Santander UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6342986 |
|---|---|
| Decision date | 2026-05-21T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | current account with overdraft facility |
| Claim type | irresponsible lending and unfair application of charges |
| Outcome | Upheld |
| Remedy | Santander must rework Mr E's overdraft balance by removing all interest, fees and charges applied from 27 March 2021 onwards. If a balance remains, Santander should contact Mr E to arrange a suitable repayment plan and may record negative information on his credit file backdated to 27 March 2021. If removing charges results in an overpayment, Santander must return the overpayment plus 8% simple interest from the date made until settlement, and remove any adverse credit file information. Santander must provide a tax certificate if requested. |
Summary
Mr E complained that Santander approved an overdraft facility and multiple limit increases that he could not afford to repay, and continued applying charges despite his financial difficulties. The ombudsman upheld the complaint from 27 March 2021 onwards, finding that Santander failed to conduct reasonable and proportionate affordability checks before approving overdraft limit increase 11 in March 2021. A proper review of readily available account statements would have revealed that Mr E's actual regular income was approximately £1,500, he maintained virtually no credit balance, and he was engaging in substantial gambling transactions using borrowed funds. The ombudsman concluded that Mr E could not sustainably repay the borrowing and Santander should have offered forbearance. Santander was ordered to remove all interest, fees and charges from 27 March 2021 onwards and arrange appropriate remedies depending on whether an outstanding balance remains.
The Ombudsman's reasoning
The ombudsman found that Santander failed to conduct reasonable and proportionate checks before approving OLI 11 in March 2021. While Santander gathered some information (account balances, turnover, credit search), it did not conduct sufficiently searching enquiries given the indicators of credit reliance: multiple recent overdraft increases, rising unsecured borrowing, and consistent overdraft usage. A deeper review of account statements would have revealed that Mr E's actual regular income was only approximately £1,500 (not the £3,440 turnover figure), that he maintained virtually no credit balance, and critically, that he was gambling substantial amounts using borrowed funds. This pattern indicated Mr E could not sustainably repay the borrowing within a reasonable timeframe. The ombudsman emphasised that while banks should not dictate spending, when a customer is constantly overdrawn and gambling with borrowed money, further lending becomes unsustainable. By March 2021, Santander should have ceased providing overdraft on the same terms and offered forbearance instead.
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