This guide will walk you through the steps you need to take to successfully reclaim your unfair bank charges. Along with tips and information this guide will help prepare you for reclaiming the money that you deserve.
What Are Your Rights As A Bank Customer?
When you first opened your bank account or took out a credit card you were in fact entering into a contract with that bank or card issuer. It is important to understand that should you go overdrawn or incur bounced payments then a charge for a breach of contract will be applied to your account.
However the sum of these charges must reflect the actual costs incurred by the lending company and not go as far as to exceed the damages the bank may have suffered due to the breach of contract. If the charges do exceed this cost then this can be seen as a penalty, which is unenforceable by the courts.
The main argument that the charges exceed the customers losses and are not enforceable by law is covered in the Unfair Terms in Consumer Contracts Regulations 1999, Unfair Contract Terms Act 1977 and at Common Law.
Some banks do argue that their charges are a fee for the use of a service, however if this is the case then they must also be reasonable under S.15 of the Supply of Goods and Services Act 1982.
Make A Note Of Excessive Charges
You have the option to try and claim back any and all excessive charges that the law would deem as penalties. This will include any charges over the amount that the infringement actually costs the bank.
For example, £20 charges for letters that are sent out to customers informing them they have gone over their agreed overdraft, charging £30 for a bounced cheque or failed direct debit or the imposition of large daily fines with interest for going overdrawn.
Spend Some Time Working Out What You Are Owed
You first need to sit down and go back through all your old bank statements and tally up all the charges you have incurred that could be considered excessive.
If you dont have bank statements going back more than a few months, then you could try checking the statements through online banking or failing that you can write to your bank and request a comprehensive list of all charges. The information requested should include what the offense was, the date, and the amount. This is all information that you are allowed to request under the Data Protection Act.
It is a legal requirement that the bank in question provide this information within 40 working days.
Under the Data Protection Act 1998, you are entitled to get from your bank a list of any charges over the past six years. Banks may charge a maximum of £10 for this.
It is worth noting however that statements are not covered by the Act, so some banks are using this to charge higher fees for this data. It is important to clearly state that you are the Data Protection Act to request a list of charges.
In order to argue against the banks’ assertions that the charges are for services rendered, it is worthwhile to request a copy of your original contract and any changes to it which you can then in turn use as evidence that you did not enter into such an agreement.
Write To The Banks And Ask For You Money Back
The key to successfully reclaiming your bank charges can in many cases be put down to persistence. You can find a letter template here. Dimply fill in the details to suit your circumstances and send the letter off to your bank. Be sure to keep a copy and note of all correspondence sent.
After a few days give them a call to make sure the letter has been received and also make a note of the time, date and the name of the person you spoke with.
Wait For The Response From Your Bank
You should hear back from your bank within a couple of weeks but failing that you may need to repeat the letter process again and follow it up with a call. If you have received a letter back with the bank confirming that you will receive a full refund then congratulations.
If like many others the bank only offers you a partial refund, then you need to reply back refusing the offer and demand payment in full.
Alternatively, the bank may send you a letter saying it will respond at a later date. If so, write and call back, stating that a set two-week period has already passed and if you do not hear a definitive answer within a further 14 days you will take court action.
Staistics show that in half of all cases the banks will bluff and write back claiming that the charges are not unlawful.
Getting Started With Court Action
At this stage you are starting to look at possible legal action. It is important you spend some time reading over the Bank Charges Hell and Consumer Action Group’s websites and see what people have to say.
You will gain a lot of valuable information from all the experiences that have been shared from other successful claimants, but be warned that from now on you will incur the cost of starting the claim yourself.
But as long as you claim less than £5,000, in the unlikely event of actually going to court, it will be heard in the small claims court, where you will not be held liable for the bank’s legal costs. For more information visit the Her Majesty’s Courts Service website and don’t miss our guide to the small claims court.
If you are going to take court action open an alternative current account in case the bank subsequently tries to close your one with them. you may also want to consider switching any personal loans you may have with the bank.
Make Your Claim
You can make your claim by going to your local County Court in person or a much simpler way is to file through the courts system’s Money Claims online service. This allows people to make claims from the comfort of their own home, save the details and make the initial payment of between £30 and £120.
Bank Charges Hell, has two examples of claims that can be adapted to suit your needs, choose either, in person or online claim.
Claimants should also register at Consumer Action Group, which has advice for making a claim.
See How The Bank Responds
After successfully completing your court claim you’ll need to wait for the bank to make their move. If the bank does not repay the money you originally claimed and instead chooses to ignore your claim you will win by default after 14 days.
In an attempt to bluff, the bank may choose to acknowledge the claim, giving it another fortnight to enter a defense. If this deadline passes without any further action by the bank, you win by default and can demand your money back.
If the bank decides to move things up a step further it may enter a defense, which is often done at the last minute, in this case follow the next steps.
The Bank’s Defense Strategy
Consumer Action and Bank Charges Hell say it is unlikely a bank will go this far. If it does however you will receive a court allocation questionnaire in which to fill in.
The pressure groups say this is the point where the bank will finally back down, usually by not turning up for the court hearing. This will in turn allow the claimant to win by default.
There have only been two bank charges cases known about in which a bank has actually gone to court, defended its charges and won.
One such case involved Kevin Berwick against Lloyds TSB at Birmingham County Court. In this case the judge ruled that the bank’s charges were in fact legitimate fees for servicing an overdrawn account. As this judgement was from a district judge it is not binding in any other court, which a High Court judgement would be. Consumer Action has said that it was disappointed by this decision but that hundreds of thousands of claims have so far been successful and people should not be put off claiming.
