As Zingle has already stated. All DD's are backed by the DD Guarantee. You have the right to claim that back. However, I am not 100% sure if this covers DD's taken for a certain period. Your bank has the power to pay you that money back, so what your bank has said is utter bullocks.
Kick up a stink with your bank, tell them you're going to switch to another bank who can provide you with a better level of customer service, then sit back and watch them jump through hoops to keep your custom.
Wouldn't be a bank that's a member of HBoS would it?
Your DD Rights
Hope you get it sorted and print that page, take it into your bank and show them that. (Link Provided)