Financial Ombudsman overdraft complaint - any experience?

debtfreein2020

Hi All
Having submitted a complaint to the FO in early March about historic overdraft charges I believe were unlawful under section 5.1.4 ‘in particular, a firm

should deal fairly with a banking customer whom it has reason to believe is in financial difficulty' of the Banking Conduct, I wonder if anyone has any personal experience?
In a nutshell, over a four year period I was in a cycle of debt, and Barclays kept upping my overdraft. A 25 year old employed girl should not warrant a £5,000 overdraft on her personal account - of course I should have stopped it but I couldn't find a way out of my debt and the interest charges kept on mounting up creating a vicious debt cycle. Over this four year period, I incurred charges of over £3,000 on my overdraft.

I strongly believe the interest charges were disproportionate and unfair given my proven inability to pay my debt. There is no question that the charges made my financial hardship considerably worse and I am still living with the knock on effect of these charges now, years down the line. I'm slowly but surely getting out of debt and that's great, but I have raised these charges with the FO because I don't think it was moral managing my account in that way.
Does anyone have any experience with complaints of this manner? Of course my first stop was Barclays (the OD provider) but they were not interested and didn't feel they had acted unlawfully.
Thanks in advance 

Thrugelmir

What hard evidence do you have to substantiate your claim? Easy to believe something oneself. 

debtfreein2020

Of course. Four years(+) of bank statements from all providers to prove my financial situation. My current account with Barclays has been open for over 15 years now and was my primary account up until 2018 so they were well aware of my finances. I'm not sure what other evidence they require but I keep good records so able to provide anything required to substantiate.

eskbanker

debtfreein2020 said:

A 25 year old employed girl should not warrant a £5,000 overdraft on her personal account

That's an opinion, but it may weaken your case if you're perceived to be suggesting that a 25 year old is a 'girl' rather than a fully-responsible adult.  Surely employment increases the chances of large overdrafts so it's not clear why you'd cite that?

debtfreein2020 said:

I strongly believe the interest charges were disproportionate and unfair given my proven inability to pay my debt.

The charges were presumably as published, so you can't really claim they were disproportionate and unfair as such - surely your argument would be that it was irresponsible lending and that they shouldn't have offered such a large overdraft if you were on a low income?

debtfreein2020

Apologies, as the thread suggests I was really just looking for people with experience of these kinds of claims - how they panned out etc, hence not giving full disclosure of my initial letter, case and evidence supplied.
I think it is irresponsible to increase the overdraft of someone who's salary they are familiar with and who constantly lives in their overdraft which is maxed out every month. The 'employed' reference really is just that - they were familiar with my salary and kept increasing my overdraft to a point where it was not relative to the salary received. My account was a personal one, not a business account and £5,000 is a fairly heft personal overdraft to give given the circumstances, again, which they were fully aware of as my primary account.

jonnygee2

£3000 of charges does seem like a lot. A lot of dependencies but I think it's worth trying the complaint.
They will obviously look at you as a capably adult, your age and gender aren't a factor, a 40 year old man and a 25 year old girl are not treated differently (nor should they be).

A big factor will be whether they tried to contact you or sent you letters offering you advice or to talk about repayments, and also whether you took any initiative there to ask for help with your debt. Normally, you get bank letters with 'if you are in trouble please phone this number or talk to us' on them, if you got those and ignored them you probably don't have a case.

Thrugelmir

debtfreein2020 said:

Of course. Four years(+) of bank statements from all providers to prove my financial situation. My current account with Barclays has been open for over 15 years now and was my primary account up until 2018 so they were well aware of my finances. I'm not sure what other evidence they require but I keep good records so able to provide anything required to substantiate.

I was referring to historic evidence, i.e. communication between you and the bank. Hindsight is easy to use to pass responsibility. 

debtfreein2020

Thanks @jonnygee2, I don't recall receiving such letters, just those to tell me the overdraft had been extended. The most recent year included in my claim finishes in June 2018, later that year the FCA intervened and the subsequent year the overdraft charging structure changed to become fairer and more transparent with a requirement for banks to identify and support customers living in persistent debt. This change to me suggests that practises prior to that were substandard. 

jonnygee2

just those to tell me the overdraft had been extended.

It's normally those ones that say something on them about getting financial help if needed. Those and the ones you get telling you about charges. Anyway, complaints are free for you to make and the bank have certainly made their money from you so I say go ahead.

dunstonh

Having submitted a complaint to the FO in early March about historic overdraft charges I believe were unlawful under section 5.1.4 ‘in particular, 

The FOS no longer consider overdraft complaints that allege unfair or unlawful.  That was following the Supreme Court case that ruled in favour of the banks back in 2009.

Today, they only consider the incorrect application of charges (i.e. charges made in error) or CURRENT financial hardship cases (not historic).  Even on hardship cases, they cannot force the bank to repay anything. Where banks do, it may only be recent charges made in the last 12 months.     They can use other methods such as suspending future charges for a period or putting you on a debt management plan.

jonnygee2

So let me get this right, you were in debt, they increased your overdraft?
Instead of not spending this increase, you thought: well what the hell, I might as well use it because they keep increasing it and I need X and Y, instead of doing without.

Does the bank bear some responsibility, of course, but so does you.  25 years old is not a 16 years old, unless you have the mind of a 16 year old.

What a load of waffle. If reading simple requests for help upset you this much, this isn't a good place for you to be. 

These boards should be a safe space for people with debt problems, current or historic. Not sure what kind of kick you get out of belittling others like this but in my opinion it isn't welcome on these forums. 

OP has asked if anyone has experience with this type of banking complaint.