Bank Charges

You might think bank charges are a thing of the past, but they aren’t

Banks are still imposing unfair penalties on account holders, some of whom are struggling to get out of debt

Historically bank customers were charged large one off fees for going into their overdrafts until 2009 when the Supreme Court halted claims

Sadly unfair overdraft charges are still a reality for customers of some of the biggest banks, but the good news is that you can do something about it

 

Need to know

  • In 2009 a Supreme Court test case slowed down the amount of claims for bank charges that the banks were receiving
  • Before the Supreme Court ruling many were claiming back historical bank charges for any and all overdraft fees imposed by the banks
  • This doesn’t mean that you cannot claim for unfair bank fees, just that reclaiming bank charges is now largely reserved for bank customers in financial difficulty
  • Because of the ruling overdraft charges at most banks have been reviewed and drastically cut. A disproportionate overdraft charge can still be claimed back in many instances
  • In 2014 Lloyds Bank lost a court case over unfair overdraft charges which could make it easier for other customers to claim. The consumer in question was charged an extortionate £743 for initially going overdrawn by £2.67. Fees of £20 a day soon mounted up until the customer decided to take legal action
 

How do you know if you can claim for unfair bank charges?

  • The main thing you have to consider when thinking about making a claim for unfair bank charges or overdraft fees is whether you were treated unfairly
  • If the charges incurred were disproportionate to the amount you were overdrawn then you might have a case to claim. Also, if you are under financial stress then your bank has to keep your best interest as a priority, if they didn’t then you can complain
  • There is no guarantee that you will be successful but it’s doesn’t take much time or any money to try
  • If you can demonstrate that the charges put you in financial difficulty, that the bank has acted irresponsibly or is pressuring you if owe them money, you can claim
 

How to claim back bank charges

Remember, unfair bank charges didn't simply disappear after the 2009 case and their are steps you can take to have your fees returned

  • If it was a one off charge and you feel it was made in error, it may be worth getting in touch with the bank as they may refund it 
  • If you want a refund for multiple or large bank charges, it may be best to write to them
  • Write and explain why you feel the bank charges should be refunded and provide any evidence to support your argument
  • The bank has eight weeks to respond to your complaint
  • If the bank rejects your claim, be persistent. Sometimes they will dismiss you to put you off
  • If you still can't come to an agreement, it's time to get in touch with the Financial Ombudsman Service (FOS)
  • They will investigate for free but will only consider cases under the following criteria:
  • The charges were disproportionate
  • The bank charges made it hard for you to get out of debt
  • Bank charges were applied when you were in financial hardship
  • Should the FOS reject your claim you can go to court if the charges are 'legally unfair' yet this could cost you 


 

The inside track

  • Despite it being more difficult to claim nowadays, you still can if you can demonstrate the bank charges were unfair
  • You’ve got very little to lose by attempting to make a claim for unfair bank charges except a little time
  • Your bank is not allowed to penalise or discriminate against you for claiming back bank charges
  • If you don’t ask, you won’t get!
  • You can claim back as far as six years
  • If your bank won’t listen you can go to the Financial Ombudsman Service (FOS) who will investigate further, for free
  • You can apply to the bank for loads of information including past statements and any charges you’ve incurred under the Data Protection Act. Don’t be afraid to ask!
  • Remember, fairness is key. If you went a few pounds overdrawn and were charged £50, the fine could be classed as disproportionate to the offence and you may be able to claim
  • If you don’t have the time, you can use a claims management company to recover your bank charges, but they will charge you
  • Remember that the rules changed in 2009, and some of the older information you will find online surrounding bank charges can be inaccurate
  • High charges for minor problems are unfair! If you think you've been treated badly, make a claim for your bank charge fees

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