New Analysis Reveals Millions Could Be Owed Thousands in Overdraft Fee Refunds

A growing body of evidence indicates that millions of UK bank customers may be entitled to refunds worth hundreds or even thousands of pounds due to unaffordable overdraft charges.

Recent research from consumer action group, Claims Bible highlights that as many as one in five current-account holders go overdrawn every day, with the average overdraft standing at nearly £700. Many of these customers have been paying interest rates that can reach almost 50% — often without banks properly assessing whether the borrowing was affordable.

Consumer-finance specialists warn that a significant number of customers have been trapped in persistent overdraft debt for months or years.

This often occurs when individuals fall into financial difficulty due to job loss, reduced income, unexpected bills, health issues, or major life changes. Despite clear signs of hardship — such as rejected direct debits, frequent overdraft use, or high monthly credit-card payments — many banks continued to charge high fees rather than offering support.

Financial-complaint case studies show that reclaiming overdraft fees can result in substantial payouts.

Some customers have already received refunds totalling thousands of pounds. In certain cases, refunds have exceeded £8,000 when banks acknowledged that charges were applied during periods of clear financial vulnerability or when overdraft limits were increased without proper affordability checks.

Customers may be eligible for a refund if they were persistently overdrawn, repeatedly paid high charges they could not realistically afford, or requested help that was not provided. Those whose overdraft limits were raised without reasonable assessment may also have grounds for a complaint.

To initiate a refund request, customers are advised to submit a complaint directly to their bank, outlining how the overdraft became unaffordable and providing evidence such as bank statements, credit reports, or proof of reduced income. Complaints typically cover up to six years of account history.

If a bank rejects a complaint or provides an unsatisfactory response, customers may escalate the matter to the Financial Ombudsman Service. The Ombudsman offers a free, independent review and can order banks to issue refunds where unfair treatment is identified.

Experts caution consumers to avoid paid claims-management companies, noting that individuals can submit complaints without incurring fees. They recommend seeking free financial guidance if needed.

With the potential for significant refunds and widespread eligibility, consumers are encouraged to review their overdraft history and consider whether they may have been affected by unaffordable borrowing practices.

Many could be owed substantial compensation — a lifeline at a time when household budgets are under increasing pressure.