Missold Overdraft

Johnb1609

Hello everyone this is my first post.

I wanted to ask for some advice on a overdraft that I have had for 13 years.

In short because of a shortfall in car finance I found myself with a £4,500 to pay back to the finance company. I approached my bank LLoyds and explained that I needed to make up this shortfall and they offered to increase my overdraft to £4,500, at the time I was a little unsure as I was thinking a loan, but the person I spoke to explained that I might not be able to get a loan but I could get the overdraft, so stupidly in hindsight I went with the overdraft.

Now 13 years later I still owe the back £4,500 and have paid back £8,192 to date in fees and interest (this figure is based on what I have been charged, so would be a lot more with calculated interest)

I am now in financial hardship and in the process of putting together my claim to reclaim back these charges.

The question is
1) Do I have a case for reclaiming all of my charges back from the bank including all overdraft fees and interest? Given I have been sold a product that was unsuitable for my situation and was effectively scared into accepting an overdraft instead of a loan. Because if I was eligible for a £4,500 overdraft I would of been eligible for a loan for the same amount?

Any help appreciated

glentoran99

I don't believe you would have a claim as just because you got a an overdraft doesn't mean you would have got the loan, besides if you haven't managed to pay the overdraft back in 13 years what makes you think you would have been able to pay the loan

[Deleted User]

No. They didn't make you spend the money.

They may suspend charges for a short period if you are currently in hardship, but you'd need to demonstrate you're not spending anything on luxuries -eg Sky subscriptions etc.

Nasqueron

If you are not spending on luxuries and can't clear the balance due to the fees then approach them for a financial hardship case and they may agree to freeze payments, refund charges for a period or help you manage the debt - they won't help if you are clearly not on the breadline and are spending money on unnecessary things rather than clearing the debt (example would be eating out, sky subscription, expensive mobile contract)

pathtofreedom

If you've improved your credit now, could you get a 0% credit card that allows that sort of balance transfer, so you could then focus on paying the debt off without fees?

Nasqueron

pathtofreedom wrote: »

If you've improved your credit now, could you get a 0% credit card that allows that sort of balance transfer, so you could then focus on paying the debt off without fees?

You'd need one of those cash transfer cards I'd assume but if he's got a huge OD and struggling to pay off may not get the best deal. Worth a look sure but the hardship case is a safe idea

pathtofreedom

Nasqueron wrote: »

You'd need one of those cash transfer cards I'd assume but if he's got a huge OD and struggling to pay off may not get the best deal. Worth a look sure but the hardship case is a safe idea

Agreed, before I discovered ynab, and when I first graduated a million years ago, I changed mine to a credit card. Just as it is a lot easier to slip back into the overdraft, unless you open a separate account and have all your bills come out of that. By keeping it separate from your main bank account I found it a lot easier to pay mine off at least.

magpiecottage

Looking at what we have been told, the OP somehow ended up failing to repay £4,500 to a finance company in respect of a car purchase.

The bank offered to lend this sum, via an overdraft, to meet the shortfall.

Whilst we were not a party to that discussion, if the OP had indicated he wished to clear the debt a.s.a.p. an overdraft would seem a reasonable option in comparison to a fixed term loan.

Subsequently it seems to have transpired that, for whatever reason, the OP has failed to exercise the discipline necessary to clear, or even reduce, the borrowing.

I suppose it could be argued that, since he failed to exercise the discipline necessary to clear the car loan, the bank should have foreseen the current problem. However, unless the shortfall arose because the OP no longer had the car, it would seem to be because he failed to keep up repayments on the associated loan - to the tune of £4,500.

If he was £4,500 in arrears at the time, it iseems unlikely that the bank would have offered a loan at all.

So, based on what the OP has told us, I think it unlikely that the bank did anything wrong.