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

Decision detail

Summary

Miss O complained to FOS about overdraft charges applied by Halifax between 2005 and February 2017, claiming they were excessive and unfair and contributed to financial difficulty. Halifax rejected the complaint but paid £100 for poor service. The ombudsman found the complaint was made outside the six-year time limit (June 2025, over 8 years after final charges in February 2017) and no exceptional circumstances applied. While the complaint could be reinterpreted under section 140A of the Consumer Credit Act 1974 regarding an unfair lending relationship, relevant case law permitted denial of remedies where claimants substantially delayed after knowing the facts. Since no charges had been applied since February 2017 and Miss O had knowledge of the facts when charges were applied, the ombudsman found no ongoing unfairness to remedy and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Miss O's complaint was made outside the six-year time limit (charges applied up to February 2017, complaint made June 2025). While the complaint could be reinterpreted under section 140A of the Consumer Credit Act 1974 regarding an unfair lending relationship, the ombudsman applied relevant case law from Smith v RBS which permits courts to deny remedies where claimants substantially delay making claims after knowing the facts. The ombudsman determined Miss O had knowledge of the relevant facts when charges were applied, as evidenced by her account statements and her continued account management. Critically, no charges had been applied since February 2017 (over 8 years before complaint), meaning the lending relationship was not unfair for a significant period prior to the complaint. Therefore, there was no ongoing unfairness to remedy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website