Claims
TL;DR
Banks are not legally required to refund overdraft charges simply because you ask. However, charges can be challenged if: the bank failed to disclose them clearly before you used the overdraft; the charges arose from a bank error; or the bank did not treat you fairly when you were in financial difficulty. The Financial Ombudsman Service can review bank charge disputes for free if the bank has rejected your complaint. The 2009 Supreme Court ruling confirmed that unarranged overdraft charges are not unfair under the Unfair Terms in Consumer Contracts Regulations, but subsequent FCA rules have substantially changed how overdraft charges must be structured.
Key facts (2026)
- The FCA's April 2020 overdraft rules required all banks to price overdrafts as a single annual interest rate (EAR), ending fixed daily and monthly fees; the typical overdraft EAR is now 39.9 percent for most mainstream banks (FCA overdraft pricing rules, in force April 2020).
- Banks must provide at least 30 days' notice before removing an arranged overdraft facility, and must have a process for customers experiencing financial difficulty (FCA BCOBS rules for personal current accounts).
- The Financial Ombudsman Service can award up to £430,000 in binding decisions against banks for unfair treatment; the FOS is free to use and its decisions are binding on banks (FOS jurisdiction 2025/26).
- The Supreme Court ruled in [2009] UKSC 6 (Office of Fair Trading v Abbey National) that unarranged overdraft charges are not subject to a fairness assessment under the Unfair Terms in Consumer Contracts Regulations 1999 because they form part of the price of the banking service.
- Under FCA Consumer Duty (in force July 2023), banks must actively identify customers in financial difficulty and offer appropriate help; failure to do so is a breach of the Consumer Duty that can be reported to the FCA or escalated to the FOS (FCA PS22/9).
What the 2020 FCA overdraft rule changes mean for claims
In April 2020, the FCA implemented major reforms to overdraft pricing after finding that the structure of overdraft charges - particularly unarranged overdraft fees - was harmful to vulnerable customers and lacked transparency. The reforms required banks to: charge a single annual interest rate on all overdrafts (arranged and unarranged), eliminating fixed daily fees, monthly fees and unpaid item charges; advertise overdrafts using a clear EAR (equivalent annual rate); and provide prompts and alerts to customers approaching their overdraft limit. These changes mean that the charge landscape before April 2020 was fundamentally different from the post-2020 environment. Complaints about charges incurred before April 2020 are assessed under the rules in force at the time; complaints about post-2020 charges are assessed under the new single-rate framework. The old fixed fee structure, which in some cases cost equivalent to more than 1,000 percent APR for short-term borrowing, is no longer permitted.
Grounds for a valid overdraft charge complaint in 2026
A complaint about overdraft charges has the best chance of success when: the bank failed to notify you of the overdraft terms clearly before you used the facility (a disclosure failure); the charges arose from a bank processing error rather than your own borrowing (for example, a payment was processed twice, creating an unintended overdraft); the bank did not follow FCA rules on treating customers in financial difficulty fairly - for example, refusing to discuss a payment plan when you asked, or continuing to add charges while you were engaging in an active repayment discussion; or the bank applied charges that were not disclosed in the terms and conditions of the account at the time. General dissatisfaction with the level of charges, without one of these specific grounds, is unlikely to succeed as a standalone complaint. The Supreme Court's 2009 ruling made clear that the fairness of the general pricing level is not reviewable by courts under consumer protection law.
How to make a formal complaint to your bank
The complaints process begins with a formal written complaint to your bank's complaints team - not a branch query or a customer service call. Submit the complaint in writing (email or letter) and clearly state: what happened; the specific charges you are disputing and why; what outcome you are seeking (refund of specific charges, explanation, or other remedy). Your bank is required by FCA rules to acknowledge the complaint within five business days and to provide a final response within eight weeks. The final response must either uphold the complaint and offer a remedy, or explain clearly why the complaint is rejected. Keep a record of all correspondence. If the final response is not satisfactory, or if the bank has not responded within eight weeks, you can refer the complaint to the Financial Ombudsman Service.
Escalating to the Financial Ombudsman Service
The Financial Ombudsman Service (FOS) is a free and independent service that resolves disputes between consumers and financial firms. You can refer an overdraft complaint to the FOS if: the bank has issued a final response rejecting your complaint; or the bank has not issued a final response within eight weeks of receiving the complaint. The FOS assesses complaints on what is 'fair and reasonable' in the circumstances, which is a broader standard than what is strictly legally required. This means the FOS can sometimes find in a consumer's favour in cases where a court would not. The FOS's decisions are binding on banks up to £430,000. There is no cost to consumers for using the FOS. You can submit a complaint online at financial-ombudsman.org.uk. You have six months from the bank's final response to refer the complaint to the FOS.
Financial difficulty: the special treatment rules
When a customer is in genuine financial difficulty, banks have obligations under FCA rules and the Lending Standards Board's Standards of Lending Practice (for current accounts) to treat them fairly. This includes: proactively offering to discuss the situation rather than simply continuing to charge; considering options such as freezing interest and charges, agreeing a repayment plan, or referring the customer to free debt advice; and not using aggressive debt collection practices while a customer is engaging in a repayment discussion. If your bank continued to apply overdraft charges while you were in financial difficulty and actively seeking help, this is a valid basis for a complaint to the bank and, if unresolved, to the FOS. Free debt advice from Citizens Advice, StepChange or National Debtline can also help you understand your options and support your complaint.
What you cannot claim back
Not all overdraft charges can be reclaimed. The Supreme Court's 2009 ruling established that unarranged overdraft charges are not subject to a fairness challenge under the Unfair Terms in Consumer Contracts Regulations because they form part of the price of banking services. This means you cannot simply demand a refund of charges on the grounds that they were too high. Charges that were clearly disclosed in the account terms, that arose from your own authorised use of the overdraft, and where the bank has not breached any specific rule or duty are not generally refundable. Older claims for charges incurred many years ago are also constrained by the six-year limitation period (Limitation Act 1980) for contract claims in England; claims for charges older than six years are unlikely to be enforceable.
Related guides
Frequently asked questions
Can I claim overdraft charges from more than six years ago?
Generally not. The standard limitation period for contract claims in England and Wales is six years from the date the cause of action arose (Limitation Act 1980). Claims for bank charges older than six years are time-barred in most circumstances. Scotland has a five-year prescriptive period for most contract claims. The FOS also has its own time limits: complaints must normally be brought to the FOS within six months of the bank's final response letter.
My bank rejected my complaint. Can the FOS overrule them?
Yes. The FOS's decisions are binding on banks and are assessed on what is fair and reasonable in the circumstances, not just on what is strictly legally required. The FOS can and does uphold complaints that banks have rejected. Approximately 30 to 45 percent of complaints referred to the FOS across all financial product categories result in an outcome more favourable to the consumer than the bank's final response.
Does making a complaint affect my credit score?
No. Making a complaint to your bank or to the FOS does not affect your credit score. The complaint is an administrative process between you and the bank. The existence of an overdraft and its balance may be reflected on your credit file, but the act of complaining about charges does not generate any credit file entry.
Can I claim overdraft charges if I was in financial difficulty but did not tell the bank?
It is more difficult to succeed if you did not notify the bank of financial difficulty, because the bank's obligation to treat you specially is triggered by its knowledge of your situation. However, if the bank should reasonably have identified from your account behaviour that you were in difficulty - for example, if you were regularly at the maximum overdraft limit and bouncing payments - you can argue the bank had constructive knowledge. The FOS will assess whether a reasonable bank should have identified distress from the account pattern and proactively offered help.
Is there a template letter for claiming overdraft charges?
Citizens Advice and MoneyHelper both publish guidance on writing complaint letters to banks about overdraft charges. Your letter should include your account details, the specific charges you are disputing, the dates they were applied, the grounds for your complaint (bank error, failure to notify, financial difficulty, or specific rule breach), and the outcome you are seeking. Keep the letter factual and specific rather than expressing general dissatisfaction. A clear, factual complaint letter with specific grounds is more effective than a general grievance.
How we verified this guide
FCA April 2020 overdraft pricing rule changes were confirmed from the FCA's final rules PS19/16 and subsequent implementation guidance. Supreme Court ruling reference was confirmed from [2009] UKSC 6. FOS jurisdiction limits were confirmed from the FOS's 2025/26 published jurisdiction rules. Consumer Duty bank obligations were confirmed from FCA PS22/9.
Primary sources
- FCA - Overdraft rules and consumer guidance
- Financial Ombudsman Service - Bank charge complaints
- Supreme Court - OFT v Abbey National [2009] UKSC 6
- MoneyHelper - Overdraft debt guidance
- Citizens Advice - Complaining about a bank
Last reviewed: May 2026.