Reclaim your bank charges

Enough of the smut for a minute. Another oft-found immortal enemy of consumer citizens at Christmas is the bank. Whilst they are more than happy to encourage us to spend, spend, spend money we do not have so we can pay them 10x the amount back for the rest of our lives, they also like put in severe financial penalties for people who don't quite stick to the letter of their respective contracts. For instance, those people who go overdrawn, often get a fine.

The Poorhouse has heard figures such as a £25+ base charge for such an offence bandied around by one bank, with a further percentage charge on top depending on how much overdrawness you have created. Fair enough, one should be a bit responsible about one's own money, but for those people who have inadvertently written one too many cheques, or the direct debits have got out of sequence or other such annoying-but-easy-to-do wrongness, this might not seem fair for going 1p over your account limit. Luckily the Office of Fair Trading agrees.

Banks are seemingly not supposed to profit from our accidental over-drafting; the fees they charge are simply to cover their costs. Or at least they should be. To quote the OFT:

A default charge should only be used to recover certain limited administrative costs. These may include postage and stationery costs and staff costs and also a proportionate share of the costs of maintaining premises and IT systems necessary to deal with defaults

Earlier this year, they did consumers the favour of coming up with a figure, above which the charges are almost certainly unfair to the extent that the OFT will challenge them on it. That figure is £12. If your bank is charging or has charged you more than that for such an infraction, even if it is written into your contract with the bank, you may well be able to get it back. For some people, this might involve quite a lot of money.

So how to get it back if you have been paying over the odds? Well, the last resort is to take your bank to court. That is probably a bit of a nerve-wracking and time-consuming thing to do, so first a polite but firm letter might be a good start. is there to help you go through the process, with appropriately worded freely downloadable form letters, guides to raising legal action and so on. Probably no substitute for an expensive lawyer working on your behalf, but most of us of course aren't in a position to go that route.

They've apparently managed to get over quarter of a million pounds refunded to people, and that's just the ones who wrote in to say thanks. It's one of those situations where you might as well try if you think you deserve it, there's nothing to lose (except a few minutes of your time and 20-something pence for the stamp).


Someone to reclaim your bank charges for you

For anyone that does desire to claim back these charges but is in two minds as to if they have time / can be bothered / feel they will win etc. there are companies that will act on your behalf. The Press Officer from Submission Technology was kind enough to contact us about his company's website who will take action against the banks on your behalf whether it is a case of simply writing a letter or attending court in your place. Of course they aren't doing this for free - taking 25% of any awards you may get - but it's no win no fee so if you don't feel up to it yourself you might like to set them onto it!

The below is their PR - the Poorhouse has no direct experience of using them so don't consider this an endorsement but as he said they might be of interest to anyone reading the about article.


Banks unlikely to be held fully accountable for 'unfair' penalty

Despite the increasing awareness of 'unfair' bank penalty charges, the
banks responsible for these excessive fees may never be held fully
accountable, states new website

It has been estimated that last year UK banks made £5bn from penalty
charges such as returned cheques, unpaid direct debits and standing
orders. Because English law does not allow 'penalty' clauses, if a
bank cannot justify it genuinely cost £25 - £38 to send an automated
letter about an unauthorised overdraft, for example, this can be deemed
'unfair' and reclaimed back.

Neil Durrant, Director for the new consumer action website, comments:
"Whilst bank customers are now becoming aware they may have been charged
fees that could be deemed 'unfair', they are still reluctant to pursue
their claims. Although some bank customers are reclaiming several
thousands of pounds, others are deterred by the perceived difficulties of
legal action, the time and the effort required to pursue such a claim."

Neil Durrant continues: "Specialised services such as now exist, enabling the average consumer to hold
banks accountable, bypassing the struggle in coming to grips with the
legal system themselves. Such specialists have existing relationships
with the banks, further to their legal expertise, so can often process the
claim to a successful conclusion much faster than the individual. Making
it easier for consumers means far more claims will be submitted and the
banks held fully responsible. It is important that consumers submit their
claims so that banks can’t simply 'walk away' with the profits."


You'd have to be to use these, why are people so lazy about getting their money back, it's not rocket science!

I guess some people just

I guess some people just don't appreciate the wonders of being a self-made mse. Or are the bossy type and like instructing other people to do stuff (at their own great cost?). Weird I know, but if you are of that type I guess 75% of the ten billion squillion pounds the bank owes you is plenty better than 0%. Not something I'd do personally mind. The rest of us can invest in a postage stamp and send our own letters.

I think these guys own greasypalm too. I bet you've been on that site? :-)

of course

yes, I don't like it though, quidco rules!

Well, I never been a fan of

Well, I never been a fan of backs and I am sure most people would say likewise. Yet, most people do have debts, do have bank loans and credits. I think they are just too powerful and I always wanted to have my financial independence. I also have a bank loan and I am seriously thinking to have a debt negotiation as an alternative so I can relax for a while.

Verdict due today.

I am one of the "stupid" people. I have registered my claim with Keypoint. Currently all claims are being held with a verdict from the main judge overseeing the OFT case due later today.

Lets hope they go with the OFT as I need the cash. The reason I am "stupid" is I now have a little one and haven't got time to mess with this stuff myself. Go go Keypoint. Link to Keypoint Bank Charges.

**News Flash**

While writing this the verdict is in and the banks have lost. $$$$$$ BBC News Story.

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