Was my overdraft irresponsible lending?

Hi. I recently had some success reclaiming my packaged bank charges.

i was given a refund after claiming it was miss-sold and that i felt pressured into taking the account.

I was only refunded the account package charges ( £15 a month) now i've continued looking into my financial past and have discovered something but i'm not sure if its worth approaching the bank about.

not only was i pressured into taking the account and overdraft in the first place, i was also unemployed and not on benefits at the time so did not have any income, but i was still given £500 overdraft.
now my thinking is here because the overdraft was given when i had NO income, it was probably irresponsible for the bank to have lent to me? even more so pressured into accepting ?

Can i claim under the same sort of principals you would approached payday loan companies when asking was the lending responsible?


  • Tom99
    Tom99 Posts: 5,371 Forumite
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    Did you spend any of the £500 overdraft?
  • kainzow
    kainzow Posts: 9 Forumite
    after month one i think i maxed it
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    I can't see ant mis selling.

    It wasn't forced upon you - it was just a facility available for your to use if you wanted to.

    And you wanted to.
  • kainzow
    kainzow Posts: 9 Forumite
    so i am correct in thinking that irresponsible lending is covered under this mis-sold umbrella? as i say i just feel that lending me £500 of cash when i have no income is basically setting someone up for years of overdraft charges ( £4500 of charges in 7 years averaging around about 50 a month in my case)
  • paddyandstumpy
    paddyandstumpy Posts: 1,486 Forumite
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    No one forced you to spend the money.

    In fact, when I recently switched banks I specifically asked for no overdraft, so this would have been an option for you too.
  • kainzow
    kainzow Posts: 9 Forumite
    now this may be the case but it was never an option i was offered
  • elsien
    elsien Posts: 32,698 Forumite
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    Words fail me.
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • dunstonh
    dunstonh Posts: 116,333 Forumite
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    edited 13 March 2018 at 10:31AM
    so i am correct in thinking that irresponsible lending is covered under this mis-sold umbrella?

    Irresponsible lending complaints that succeed are not common. Mainly tends to work where the person has a mental illness which the bank should have been aware of or the amounts are significantly out of proportion with the circumstances.
    so i am correct in thinking that irresponsible lending is covered under this mis-sold umbrella?

    A small £500 overdraft facility is peanuts on an account that is, by default a credit facility, is highly unlikely to be considered irresponsible lending.

    Do you have a mental illness that the bank should have been aware of? The amount is not really in the ballpark otherwise.

    edit added: Reading some FOS decisions (and its hard to find many on small overdraft facilities on personal accounts. its mostly loans, credit cards or mortgages with a few larger overdrafts - i.e. £5000 or so), it does appear that the status at point of credit is considered. Indeed, a common FOS wording is "At that time, H didn!!!8217;t appear to be in financial difficulty" or words similar. i.e. at the point the facility was offered, were you in financial hardship.

    Just spending the money through lack of control is not grounds for complaint. It really needs to be irresponsible.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Sounds more like Irresponsible Spending.

    Save £12k in 2019 -
  • [Deleted User]
    [Deleted User] Posts: 26,612 Forumite
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    edited 13 March 2018 at 1:00PM
    kainzow wrote: »
    i just feel that lending me £500 of cash when i have no income is basically setting someone up for years of overdraft charges
    As already explained to you on your previous thread, those historical charges won't be refunded to you. The Banks won their court case on charges in 2009.

    The only success stories reported where customers have alleged "irresponsible" lending are with PayDay loan companies or where lenders have loaned a large amount (much more than £500) to someone who clearly could not afford to pay it back.

    The Bank gave you an overdraft facility. It was your own choice whether to use it. Your causation argument doesn't wash either, you should have informed the bank you were in current financial difficulty at the time if you were struggling.

    In addition, the question has to be asked of why an unemployed person would deliberately run up a £500 overdraft in only the first month of getting the facility? As others have said, that would be irresponsible spending-not irresponsible lending.

    Do you even have proof that you told the Bank you were unemployed prior to this overdraft being granted? If not, this "complaint" is even more of a dead duck I'm afraid.

    Take solace in your other recent refunds:
    kainzow_ wrote: »
    the bank has actually sent me an unexplained large cheque last year (about £1400). it only just stated that they had reviewed my account and found that I had been treated unfairly.
    kainzow wrote: »
    So, 2 days after complaining about my packaged bank they have refunded me 1600 pounds!
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