Home > Financial Services > Reclaiming Bank Charges

Reclaiming Bank Charges

By: J.A.J Aaronson - Updated: 8 Sep 2012 | comments*Discuss
 
Bank Charges Reclaim Reclaiming Illegal

One of the biggest financial stories of the last year has been the sudden rush amongst some consumers to attempt to reclaim charges levied by their banks. The apparent illegality of these disproportionately high charges became widely known, and consumers have now received refunds totalling around £1 billion. This has been based on the principle within contract law that states that any charges incurred for breach of contract must be proportionate to the costs of the charger; £70 to send a letter informing a customer that they have exceeded their overdraft limit is clearly disproportionate, and so it is generally accepted that consumers have a legal entitlement to reclaim their charges.

Legality

In the first instance, it should be noted that the banks maintain that their charges are perfectly legal. As a result, a test case has just started (as of late January 2008) to try and establish the legal position. While this is going on, the Financial Services Authority, which regulates the financial services industry, has suspended the right of the consumer to reclaim their charges. Even taking that into account, however, there is a time imperative that means you should consider taking action now - you can only reclaim charges that were made up to six years ago.

Before you begin, it is vitally important that you prepare the ground for your claim. Even with the suspension, there are certain steps that you can take to set the ball rolling. Initially, it is advisable to set up a second bank account. Initially, many banks reluctantly paid back the charges, but demanded that the consumer take their business elsewhere. Even though the Ombudsman has stated that this practice is unlawful, some instances are still being reported. As a result, you should have a back-up account ready.

Adding It Up

After this, you should ascertain exactly how much you are owed. If you have six years' worth of statements then this will be easy to do, as they will be detailed on these documents. If not, you can make a request under the Data Protection Act; write to your bank asking them to give you a breakdown of the charges. They will probably charge you for this, but they are only legally entitled to charge a maximum of £10 and they must fulfil your request within forty days.

Once you have worked out how much you are owed, the next step is simply to write to your bank and demand a refund. Your letter should state exactly how much you are owed, and you should enclose a full list of the charges. You may also find it useful to include details of cases that have established precedent in this area; the most frequently cited is Dunlop Pneumatic Tyre Ltd v New Garage and Motor Co Ltd (1915). It seems that those who demonstrate some legal knowledge tend to have the easiest time when dealing with their bank.

At this stage you will be able to do no more as a result of the FSA's suspension, and you should receive a letter from your bank informing you of this. The dispute over the legality of the charges will soon be concluded, however, and as a result you will either be able to continue with your complaint or you will be forced to abandon it. This article will be updated when the case is concluded.

Related Articles in the 'Financial Services' Category...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Comments
  • DEE
    Re: Compensation Payouts Held in Trust
    How do you go about if your child has attained the age of 18 years and the lawyer handling the case has refused any…
    15 October 2017
  • Ant
    Re: 'No-Win, No-Fee' - Too Good to be True?
    I was pressurised into buying a product that was sold to me with the understanding I had a 14 day cool off period.…
    4 October 2017
  • Retired61
    Re: What Can You Claim For?
    Many thanks for your reply. Even if the builders have a right to access to my property (which I dispute), should they not have to apply…
    15 November 2016
  • CompensationCulture
    Re: Problems with Personal Injury Claims
    shunty - Your Question:My car got shunted at a roundabout by a driver who came up the motorway slipway too fast. The…
    2 November 2016
  • shunty
    Re: Problems with Personal Injury Claims
    My car got shunted at a roundabout by a driver who came up the motorway slipway too fast. The driver admitted liability.…
    1 November 2016
  • Rainey Smith
    Re: The Victim Contact Scheme
    What would a huge increase in relevant traffic mean for your business? If I could greatly increase the amount of customers who are…
    16 June 2016
  • CompensationCulture
    Re: What Can You Claim For?
    Retired61 - Your Question:Without prejudice. Builders working next door have removed and killed most of a beautiful Virginia creeper on…
    14 June 2016
  • Retired61
    Re: What Can You Claim For?
    Without prejudice. Builders working next door have removed and killed most of a beautiful Virginia creeper on the wall they are working…
    13 June 2016
  • Nusrat Jabeen
    Re: Damages Under the Human Rights Act
    Social services forced me to leave my house , police were also used . When I did complaint against this incident , social…
    26 July 2015
  • Liza Morris
    Re: The Victim Contact Scheme
    We are Internet Marketing experts who can help you answer these questions, drive mass traffic to your site, and dramatically increase…
    29 August 2014