Overdraft charges and interest: when you can complain and ask for money back

If you have lived in your overdraft for months or years, with interest quietly eating a chunk of every pay cheque, that is not just bad luck - it is a situation your bank has specific regulatory obligations about. Complaints succeed when they show the bank saw the pattern and kept charging anyway: repeat use it never addressed, a limit that was never affordable, or difficulty it ignored.

This guide explains the three overdraft complaints that actually work, the rules behind them, and how to put the evidence together.

Key takeaways

• Since April 2020, banks must charge overdrafts as a single annual interest rate - no daily fees, no higher rate for unarranged borrowing.
• FCA rules require banks to monitor repeat overdraft use and intervene where it signals financial difficulty - not just keep collecting interest.
• An overdraft is credit: an unaffordable limit or limit increase can be complained about like any other unaffordable lending.
• Banks must treat customers in financial difficulty with forbearance - support, not just charges.
• If the bank says no, the Financial Ombudsman Service is free and independent.

The three complaints that work

1. Repeat use the bank never addressed

This is the most common pattern and the most underused complaint. FCA rules require firms to have policies to identify customers showing a pattern of repeat overdraft use, spot where it indicates actual or potential financial difficulty, and take steps - contact the customer, explain the cost, offer realistic options to reduce reliance.

If your statements show you deep in your overdraft every month for years, paying interest that meant you started each month behind, ask the obvious question: what did the bank actually do about it? A yearly generic email about "managing your overdraft" while collecting hundreds in interest is thin. The complaint writes itself from your statements:

Month	Days overdrawn	Deepest point	Interest charged
January	28	-£1,450	£24
February	30	-£1,520	£26
March	31	-£1,580	£27

A table like this, across a year or three, shows dependence - the balance never clears, the interest compounds the problem, and the bank had a front-row seat.

2. The limit was never affordable

An overdraft is regulated credit. Granting a £3,000 limit to someone whose account already showed strain - or raising the limit unprompted while the account lived at its floor - raises the same creditworthiness questions as any loan. The bank had perfect information here: it could see your income, your outgoings and your pattern in its own data. Frame it exactly like an unaffordable lending complaint: what did the bank know when it set or raised the limit, and what would a proportionate check have shown?

3. You told them you were struggling - and nothing changed

Once a customer flags financial difficulty, firms are expected to respond with forbearance: consider suspending or reducing interest, agree an affordable path to reduce the balance, signpost free debt advice. If you told your bank you could not clear the overdraft and its answer was, in effect, "the charges stand", that handling is challengeable - especially if the charges then deepened the hole.

Sources: FCA overdraft rules (CONC 5C) on pricing, CONC 5D on repeat use, and Financial Ombudsman Service guidance on unaffordable lending. Last checked: 04.07.2026.

What is not a strong complaint

Honesty helps here. These usually fail on their own:

• "The interest rate is too high" - rates around 35-40% EAR are common and lawful under the single-rate rules; price alone is rarely enough.
• "I didn't realise I was using it" - statements and app notifications usually undermine this, unless something specific misled you.
• One-off charges during a brief overdrawn spell, correctly applied under the account terms.

The winning theme is not the existence of charges - it is the duration and pattern the bank watched without acting.

What evidence helps most

• statements covering the whole period - the single most important item; they show the pattern the bank saw
• the account's interest rate and charges history
• records of any limit increases and whether you requested them
• every message where you mentioned struggling, and the bank's replies
• other borrowing at the time - loans or payday lending that fed the overdraft or vice versa
• notes on the harm: missed essentials, borrowing elsewhere to cover the overdraft, stress

How to structure the complaint

1. Name the period and the pattern: "continuously overdrawn from [year] to [year], charged approximately £X in interest."
2. Pick your grounds: repeat use never addressed, unaffordable limit, poor difficulty support - or more than one.
3. Show the table of months, balances and charges.
4. Say what the bank should have done, and roughly when the intervention point was.
5. State the outcome: refund of interest and charges from that point, an affordable arrangement for the remaining balance, and credit-file corrections if markers resulted.

When and how to escalate

If the bank rejects the complaint or eight weeks pass, you can take it to the Financial Ombudsman Service. The Financial Ombudsman Service is free, independent, and you keep any compensation it awards. Complaints usually need to come within six years of the events or three years of when you reasonably realised there was a problem, and six months from the final response - long-running overdrafts often span these limits, so escalate rather than self-reject; check the current time limits.

For context, our analysis of published Ombudsman decisions shows loans and credit complaints are one of the stronger broad categories, but overdraft cases still need the repeat-use pattern.

How HeyRefund can help

Overdraft complaints live and die on the pattern, and the pattern is buried in years of statements. HeyRefund helps you extract it - the months, balances and charges - and build the timeline and complaint around the moment the bank should have stepped in.

Complaining and escalating are free, and you keep any refund. HeyRefund just turns the statements into a case.