Martin Lewis fan receives £1,200 from bank for expensive overdraft fee – how you can too

A MARTIN Lewis fan has received over £1,200 from her bank due to ‘unfair’ overdraft charges.

With a cost of living crisis weighing on household budgets, many could find themselves in the red while struggling to make their money work.

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Here’s what to do if you were also unfairly charged overdraft feesCredit: Getty

But if you fall into your overdraft, you’ll likely be slapped with exorbitant fees by your bank.

The annual interest rate you’ll pay on your overdraft is typically 40%, which is much higher than a typical credit card, which is typically 18%.

Martin Lewis previously referred to overdrafts as “risk debt” because of these large charges.

But you might be eligible for compensation if you’ve been slapped with a fee – and find yourself in financial trouble.

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Lenders have a responsibility to treat you fairly if you are in financial difficulty to prevent you from taking on more debt.

A Martin Lewis fan has explained how she managed to recover £1,200 by standing up to ‘unfair’ charges in the latest MoneySavingExpert newsletter.

The reader, named Sue, said Santander slapped her with overdraft charges that put her over her overdraft limit.

She wrote to Santander but they refused to return the money.

“But I persevered and wrote to the ombudsman – and after 12 months the money was credited to my account,” she said.

How do I know if I was wrongly charged for bank overdraft fees?

1. Bank charges caused you financial hardship

Lenders have a responsibility to treat you fairly if you are in financial difficulty to prevent you from taking on more debt.

So if you are having financial difficulties, he should do everything possible to help you get back on your feet rather than making things worse.

According to the FCA, you are considered to be in financial difficulty if:

  • You regularly fail to pay even the minimum repayments of any borrowed money,
  • You have detrimental marks on your credit report, such as payment defaults,
  • Most of your income goes to paying off debt and you may have had to take out a loan to help pay it off,
  • You have taken out a Debt Management Plan (DMP) or another debt solution such as an Independent Voluntary Arrangement (IVA),
  • You spoke to a company, such as a supplier or charity, about signing up for a debt management plan or how to get help.

You are unlikely to tick just one of these boxes – you will need to encounter a few for your complaint to be successful.

You will also need to be able to back up each point with evidence, such as letters and statements.

2. You asked your bank for help but they didn’t offer you anything

If you’re having trouble keeping up with refunds and you’ve asked your bank for help and they haven’t offered anything, the subsequent charges may be unfair.

Reasons for not tracking reimbursements include mental health issues, you just lost your job, or were on maternity leave.

The bank should have realized that you are in a vulnerable position and offered to help.

You will need to provide proof that you spoke to your bank, what you told them and that they did not help you.

3. Your bank has increased your limit to an unaffordable level

You can also argue that you were unfairly lent if your bank increased your overdraft without you asking them and you ended up with charges that you can’t track.

Sara said: “I suggest you apply the ‘man in the pub’ test. Imagine describing your situation to a stranger in the pub and you tell him your bank has increased your credit limit to £8,000 and you also tell what you won .

“If the other person seems surprised, that’s a good complaint.

“If you have to spend some time explaining your situation and they seem sympathetic rather than shocked at how your debt has gotten too big, then your case may not be so good.”

you will then need to write to your bank to tell them how the charges have affected you and made your financial situation worse.

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MoneySavingExpert and Money.co.uk both have a free template you can use.

The bank then has eight weeks to study your file and get back to you.

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