Claiming back unfair bank charges
Obviously, the best thing to do would be to not be charged in the first place. However, everyone makes mistakes and the charges can often leave you short for the month meaning it starts off a spiral of increasing bank charges.
The Law
Most penalty charges are unlawful. Charges can only be imposed by the banks if they are proportional to the cost of handling the problem. Most banks will charge £30 for going over your overdraft limit – it doesn’t matter how much; it could be 1p or £1,000. You will still be charged for the bank to send you an automated letter. £30 for an automated letter appears to be out of proportion. This means it is against the law and you should be able to claim back those charges.
What can I do to get my money back?
Firstly, setup another bank account with a different banks. Banks are fighting back and there is a chance they will pay you the charges back, but shut down your account. It’s better to be safe than sorry. Now, write a letter to the bank asking for the bank charges back. State that you believe that the penalty charges they imposed on you were disproportionate and that you would like your money back.
If the bank refuses to repay the money (they will often just ignore the complaint, or tell you that they believe the charges are not unlawful), tell them you will take the case to the small claims court if a settlement cannot be reached. Most of the time, the bank will now settle with you. You will probably not get all your money back. It is up to you what figure you accept as the settlement.
If the bank still refuses to settle with you, take it to court. Speak to the CAB and get legal advise. Bear in mind that just because you are taking it to court does not mean that you will get your charges back. Think very carefully about whether you can spare the time and effort that going to court will entail.
How far back can I claim?
You can claim charges from up to 6 years ago. If you do not have full records of your account going back that far, write to the bank asking for a full and comprehensive list of all charges made on the account. Request that each charge includes the date the charge was made and also the reason for the charge (eg overdraft limit exceeded). The bank has 40 days to provide you with this information under the Data Protection Act. If they do not provide you with the details, report them to the Information Commissioner. You can also claim 8% APR on each charge – this is allowed by the 1984 County Courts Act, so make sure your final figures include this interest!
Avoid history repeating itself
The best way to stop yourself from being ripped off by the bank is to not incur the charges in the first place. Try to budget so that you don’t miss payments and you won’t go over your agreed overdraft limit. Banks are moving towards reducing their charges, but in the meantime, don’t give them the chance to make some more money out of you.
If you would like to see a template letter to guide you through making your first contact with the bank over the unfair charges, please click here.
Click here if you would like to download the template letter in a Word (.doc) format.
Additional Information
Banks have cottened onto this latest consumer fight-back and are now charging hundreds of pounds for copies of statements. So, if your bank tells you you need to pay, follow these instructions:
- Write a letter to the bank’s data controller stating that you require information on your past charges (note: do NOT mention past statements) under the Data Protection Act. The bank is entitled to charge you £10 for this. Keep a copy of this letter for yourself, and get a proof of posting if possible.
- The bank have 40 days to reply.
- If the bank argues, or does not reply, write to the Information Commissioner and send a duplicate of this letter to the bank’s data controller.
We’d love to hear from you – whether you are successful or not – so please join our community here. If you have any questions, please ask on our forum!
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18 Comment(s)
2 Trackback(s)
- From » Are the banks obliged to give you six years of bank statements if a customer requests it? - Personal Loan Biz | Mar 9, 2007
- From Banks retreat over charges test case - Money Towers | Jun 29, 2007
Dave | Feb 14, 2007 | Reply
Is this information applicable only to current account holders or any account holder such as business users?
Sarah | Feb 15, 2007 | Reply
I should think you will be able to claim back on business accounts too – the charges are unlawful, no matter what the account.
Dave | Feb 20, 2007 | Reply
Can I claim back late payment charges and exessive interest charges on a city bank credit card even if I dont remeber the account number.
Thank you
Dave
Leon | Feb 26, 2007 | Reply
I heard that some banks are now dumping customers who try to claim back unfair charges. Is this true? I have sent my first letter and received the last 6 years of computer printout quite quickly and to my surprise they don’t appear to have charged me £10 for it.
thanks, Leon
Tad | Feb 26, 2007 | Reply
Yes – sometimes, the banks are shutting down accounts of the people who are claiming back the charges so it’s a good idea to open up a current account with a different bank just in case.
mrs A Brown | Feb 27, 2007 | Reply
i have been charged for as little 5p short of my direct debit.
david | Feb 27, 2007 | Reply
can you clam back bank charges if you our in credit
ian kershaw | Mar 4, 2007 | Reply
can i claim back overdraft interest charges on a buisiness account
catherine | Mar 5, 2007 | Reply
can you claim back charges for an account that the bank refused to give an overdraft on I have a current account and a step account that I have been charged on.
darren | Mar 7, 2007 | Reply
i have just received £400 back from my bank and i have a step account
danny | Mar 15, 2007 | Reply
we would like to claim but we need a 3000.00 overdraft fercility would we get the same at another bank regards danny
alec | Mar 19, 2007 | Reply
here is some good news . i was claiming the tsb for £1,500 and got a court
date back in dec 8TH 2006 , but i didnt turn up at court because i just bottled it so i assumed i lost . but out of the blue with no letter from the bank they just paid the money into my account on the 12TH march2007 . when i asked why, all i got was , nobody reallys knows i was told . so my advice to everyone who is claiming keep on going . alec
Jane Dawson | Mar 21, 2007 | Reply
Hi,
Until 3 years ago when illness initiated I had to stop working, I got into serious debt with first the Royal Bank of Scotland and then the Clydesdale Bank, I ran a small business training Point to Point horses, Hunter Liveries and a small stud.
These banks have made my life a misery , firstly with constant bank charges for being slightly overdrawn to assisting in the pressure they put on me becoming ill. My overcharges have amounted to much more than I have spent, how can I try to re-coup some money and help me during my debilitating illness having to spend my precious disability and Income support money paying them back. I once told 1 bank manager that he and his bank were nothing short of being bandits he was mortified!
Yours sincerely,
C.E. Jane Dawson
Donna M Cumming | Mar 29, 2007 | Reply
I have read your site with interest and hope to put in a claim for my charges soon – However, I have been unableto open your draft letter. Can you please send this to me.
Thanks
Donna
jo | Mar 30, 2007 | Reply
we are looking at clamming our money back but if we are in our overdraft by 2400. and they paid us back 1000. could they still close the account even though we cany afford to pay the other 1400. as yet
john | Jun 21, 2007 | Reply
I have had two replies from the Halifax to say I knew what the charges were when the account was set up some 15 years ago along with a leaflet of current charges-it also detailed how to avoid charges as if I was still a customer however I cancelled my account with them because of their charges it was if they hadnt read my letter they did itemize their charges so I am now determined to pursue them even if I lose and it costs me- an overdraft was one solution suggested but they turned me down
mandy | Jan 30, 2008 | Reply
tryed claiming my bank charges back . we reseved a letter back from the bank saying thay are doing nothing until after the court case. does this meen thay are no longer paying out.
donna | Jun 16, 2008 | Reply
can u claim back overdraft charges .