Reclaim Bank Charges

Bank charges mean big money for banks and thousands of people have started proceedings to reclaim these bank charges. A lot of careless customers fail to read the terms and conditions that apply to their current account. Research shows that in the UK about 41% of people do not know the interest rate that applies to an unlawful overdraft. What is more, 19% of people are always overdrawn.

If someone writes a cheque, but actually there is not enough money to cover it or someone takes too much out at the ATM, the banks will charge him – and the charges will be costly.

When we open a bank account, we enter into an agreement with the bank, which includes some charges that the bank can apply. The bank is allowed to make legal charges in the amount they will lose in a certain situation. That means banks can charge if you withdraw money by exceeding the overdraft or by writing a cheque that can’t be covered. If for any reason you did not succeed in paying the minimum payment on your credit card, the bank is allowed to charge you for this. The bank also charges for the cost of sending you a letter to let you know what has happened in these cases. The law says they can only impose fees which are directly in proportion to their administration costs.

Are banks in the right to charge us for being overdrawn?

In the case of breach of contract, any charge should not exceed the costs of the breach. Banks can massively overcharge for unlawful administrative costs.

Banks can also charge for transactions that we may carry out while being overdrawn and this can be costly and frustrating.

It is very critical for many people to reclaim bank charges. You need to know the rules of your bank to see how to reclaim charges. To reclaim bank charges you may want to apply to a reclaim bank charges solicitor or lawyer, or even get a new bank account. There are several ways to reclaim some of the money, especially if they were wrong.

If you threaten your bank with well-worded letters, or if you apply to reclaim bank charges lawyers, there is a chance that you’ll get your money back or part of it. Banks typically ignore first letters and claim they have done nothing wrong, but are ready to make a settlement anyway to reduce their legal costs. Paying off a few people is simple damage limitation. We will come to this later. So, what are the best steps to take in order to reclaim bank charges?

The actions you should follow to reclaim bank charges:

First of all, you need to identify and calculate all relevant charges over the last 6 years including statutory interest.  Then write to your bank to let them know which charges you are disputing and why. If you can, find the point of law that applies to the charges in your information about your account, as this will really help your case.
If you take the time to look on the Internet, it is possible to find letter templates for your claim which will make knowing how to word the letter much easier. Don’t forget to include a deadline for a response in your letter.

Sometimes the banks offer a full or partial refund to avoid going to court. If this happens immediately and you are happy with the amount offered, then you won. However, most times they ignore the letter. If this happens, or if you want a larger refund, write to your bank again. Give them a time limit within which they must respond and let them know that you plan to take legal action. You can also find good reclaim bank charges solicitors to make the claim against your bank charges on your behalf. However, there is no guarantee of winning, but the legal firms will look at certain cases to see if there were other cases where someone filed against that bank, and as this does not put your case at risk, you should use this information to help. If you are offered a settlement – think about taking it, because getting full payment is less likely nowadays.

When is it right to reclaim bank charges?

There are three different scenarios under which it’s appropriate to reclaim bank charges:

1. If you’re in financial hardship:

What is considered a financial hardship includes: can’t pay for necessities, can’t pay debts, disability or illness, going bankrupt or into debt management, drop in income, lost your job, separated from your partner, partner has died, started education, gone to prison, frequently go over your overdraft limit, cash withdrawals from credit cards to make ends meet and more.

2. The charges are inconsistent:

If you accidentally went over your limit by a few pounds and the charge is a lot higher than the ‘offence’.

3. You are / were stuck in a cycle of charges you cannot break out of:

This is known as snowballing- which means you’ve had charges on charges, so you’ve not been able to clear charges before new daily or monthly fees are added on top.

If the bank refuses to refund the charges then there are two options:
1) Make a claim in the Court,
2) Submit the matter to The Financial Services Ombudsman who can examine the complaint and order the bank to pay a refund.

It is highly recommended that you should submit your petition to reclaim bank charges quickly for there is a 6 year limit from the date of a claim being issued. Issue a claim now to ensure you can reclaim back as far as possible.

Remember even in the days when banks were paying back millions to re-claimers, almost everyone who wrote got a rejection letter first time.
Don’t give up. Call or write another letter and/or let your reclaim bank charges lawyers show that you’re not going to give up easily on fighting the charges. This could persuade the bank to settle.

It’s far more common that a settlement is reached without a formal investigation and negotiation being necessary.  So, you have nothing to lose when you reclaim bank charges!