Ben’s bank changed the way it was applying charges to his overdraft. So he found himself paying much more for his debt.
What happened
Ben had a very low income and when his bank changed the charges on his overdraft, it made his financial situation worse.
Ben’s bank wasn’t fully aware of his financial situation when it made the change.
His bank had told him about the change to the charges in advance. But he wasn’t able to pay off his overdraft. He felt he’d been forced to accept a change that made him worse off.
He complained but was disappointed with his bank’s response, so he came to us.
What we said
We looked at all the available evidence.
We thought it was unlikely that Ben would have known his bank might increase this charge when he first agreed to his overdraft.
He couldn’t have found a way to clear his overdraft before the change took effect. So, we thought it was fair for his bank to refund the fees he’d been charged since the change, and to stop future changes.
After reviewing Ben’s situation, the bank gave him notice under the terms and conditions, closed the account and recorded a default.
It agreed the overdraft was clearly unaffordable for Ben and he wasn’t likely to be able to pay back what he owed them over a reasonable period of time.
Ben was unhappy with this. He didn’t want his credit file affected.
We thought the bank’s actions were appropriate and proportionate. We didn’t think they should have to provide Ben with an overdraft free of charge.
We agreed it was unlikely he could pay back what he’d borrowed even after the charges had been refunded. Under the terms, the bank could always revoke the account and ask Ben to repay what he owed.