Frequentely asked question

The Financial Ombudsman Service – and courts across the country – have put individual complaints about unauthorised overdraft charges on hold, while waiting for some important legal decisions to be made.

The Financial Services Authority (FSA) has also agreed that banks can suspend their work on complaints about these charges, until the legal position is clarified.

what's the legal position on unauthorised overdraft charges?

The Office of Fair Trading (OFT), seven UK banks (Abbey, Barclays, Clydesdale, HBOS, HSBC, Lloyds TSB and RBS) and Nationwide Building Society brought a legal "test case" – to get answers from the court to important questions about bank charges for unauthorised overdrafts. This is a complex process and the "test case" may take some time, before all the issues are resolved.

The OFT has a on its website about the legal "test case". And the FSA also publishes information about .

I'm not happy with my bank's response to my complaint about charges – can the ombudsman get involved?

We need to know the final outcome of this important legal action, before we can make decisions in individual complaints about unauthorised overdraft charges. The law is one of the things that the ombudsman has to take into account when we decide cases. So we have decided not to continue our work on unauthorised overdraft charges until the legal position has been clarified.

my complaint is already with the ombudsman service - what does the "test case" mean for me?

If you have already referred your complaint about bank charges to the ombudsman service, we will continue to hold onto your case – until the important legal questions have been answered. You don't need to do anything else right now. We'll be in touch with you, when we have news to report.

I haven't complained yet about unauthorised overdraft charges on my account - does this mean I'm too late?

You can complain now to your bank or building society - or you can wait until the "test case" issues have been finally resolved. If you complain now, your bank or building society must acknowledge and record your complaint. But the complaint will not be dealt with until the legal position has been clarified.

what about complaints that involve bank charges as well as financial hardship problems?

If you are in genuine financial hardship, you should let your bank or building society know as soon as possible. Give them the necessary information about your financial circumstances to enable them to consider your situation fully. If you are unhappy with their response, you can make an official complaint – and your bank or building society must deal with that complaint.

If your bank or building society agrees that you are experiencing financial hardship, they should suggest an appropriate settlement. This may or may not involve a refund of charges – depending on the circumstances.

If you're not happy with your bank or building society's response to an official complaint, we can look to see if we are able to deal with your case before the legal position on bank charges has been settled under the "test case" legal action.

We have written to the major current-account providers and claims-management companies to set out our approach to cases involving current account-charges and financial hardship – and to ask for cooperation in ensuring the efficient handling of these complaints.