Ravi did not have an arranged overdraft on the account and said he should not have to repay the debt, which included fees and interest on the overdrawn amount.

The bank offered Ravi two options. It could deduct all interest and fees charged to date, provided he began making regular repayments, but it would continue to charge fees and interest on the remaining balance until the debt was repaid. Alternatively, it could deduct all interest and fees and reduce the remaining balance by a small percentage if Ravi immediately repaid the debt in full.

Our investigation

Ravi was unhappy with either option and complained to us. He said the bank should accept some responsibility for the situation because he believed he had been spending his own money. We explained the bank was entitled to seek repayment of the money spent because he had received the benefit of that money. Furthermore, the terms and conditions of the account allowed the bank to honour transactions even if the account didn't have enough money in it.

We considered the bank’s options to be reasonable.

Outcome

Ravi accepted the second option.