Reclaiming Unfair Bank Charges
The ongoing dispute about high bank charges is still unresolved as the Office of Fair Trading (OFT) have once again delayed their decision.
Last year, the OFT decided that the majority of penalty charges imposed by banks are far too high, for example a fine of £39 for going over an authorised overdraft limit. The OFT ruled that this charge should, realistically, be no more than £12 which would reflect the actual cost of processing.
These charges amount to an estimated £3.5 billion of the banking industry's income and unsurprisingly, the highstreet banks are not overjoyed with the number of reclaiming cases they have recently received.
Up until now, every case brought up by a customer has been settled out of court by the bank involved. However, as a result of the volume of cases, the OFT has now got involved and is due to make a decision in the test case. This decision will ultimately determine the future of reclaiming unfair bank charges.
Previous to the hold on reclaiming cases until the outcome of the test case, over 150,000 customers had successfully raked back charges from their bank.
How do I start
You must remember that while the OFT test case is ongoing, all cases have been put on hold, although there are some steps you can take to get the process underway.
First of all you should set up an alternative current account. This is simply because banks have been known to shut down the accounts of customers who have successfully reclaimed unfair charges in the past.
Despite calls from the Financial Ombudsman for banks to refrain from doing this, you should still do it as a precautionary measure.
You are able to claim for the past six years in England and Wales, it's only five years in Scotland, including the account you currently hold along with any you may have closed down.
So, obviously you have to collect statements. This is much easier if you have access to online banking, however, if you don't then simply send a letter to your bank requesting a comprehensive list of all your past charges/fines.
Some banks will complete this request over the phone. Although, because they are allowed to charge £10 to post out the information, many of them require you to send a letter with a cheque enclosed.
This is the legal part, and by law the banks have 40 days to respond. If they fail to get the information to you, follow up with a telephone call and then report them to the Information Commissioner.
The final step is to simply write to your bank requesting that they refund the charges. Make sure you include the full amount and the evidence (the statements).
You can also ask for the interest back, but obviously with this there is a risk that the banks will refuse because you are asking too much.
You should get a reply from the bank to acknowledge that they have received your complaint, but they will also point out that they have permission to hold all cases until the outcome of the test case.