first direct overdraft refunds

Last updated 20 October 2026 · Written by the Claims & Refunds team · How we write our guides

first direct launched in 1989 as the UK’s first phone-only bank, and is part of HSBC UK. Its current account comes with an arranged overdraft, and some customers relied on theirs for years.

In March 2020 first direct raised its overdraft rate from 15.9% to 39.9% EAR on balances over £250. At the time of writing its overdraft page shows the first £250 interest-free, then 39.9% EAR (variable). Because first direct is part of HSBC UK, the business named in Ombudsman decisions is HSBC UK Bank plc. See also HSBC overdraft refunds.

This isn’t the old “bank charges” claim, which closed after a Supreme Court ruling in 2009. Today’s overdraft complaints are about whether first direct kept letting you use, or raised, an overdraft you were relying on and struggling with, without stepping in to help.

Could you have a claim?

Banks are expected to spot customers who use their overdraft heavily and repeatedly, and to contact them and offer help. first direct may not have done enough if:

• You were in your overdraft most of every month, often for years
• Your wages only just cleared it, or never did
• Your overdraft limit was raised while you were struggling
• You had returned payments, unpaid direct debits or charges stacking up
• You were also using payday loans or other high-cost credit

What you could get back

If a complaint is upheld, the usual outcome is a refund of the overdraft interest, fees and charges from the point the bank should have stepped in. If you still owe money, the refund normally comes off the balance first. Where you’ve paid it off, 8% simple interest a year is usually added. Negative marks about that lending may also be removed from your credit file.

In one published decision (DRN-5450799) a customer’s regular, long use of his first direct overdraft from January 2020 pointed to financial difficulty, and the bank was told to remove all overdraft interest, fees and charges from then. Every case depends on its own facts.

How to complain to first direct

1. Write to first direct saying you were relying on your overdraft and struggling, that they didn’t step in, and asking for a refund of interest, fees and charges. Our free complaint letter has the wording.
2. first direct has 8 weeks to send a final response.
3. If you’re unhappy with it, or 8 weeks pass with no answer, you can take it to the Financial Ombudsman Service for free. You usually have 6 months from the final response.

You don’t have to use a claims company. If you’d rather a regulated firm did it for you, do our free check.

Check my lending claim

More about bank overdraft claims.

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