Claiming back ‘unfair’ bank charges – the process

The process of claiming back UK bank charges is relatively simple – the main things you need are :-

  • patience
  • determination
  • research time

You don’t need any special knowledge, this can all be gained on the way, but you must ‘start with the end in mind‘. Although the process is relatively straightforward, there is a chance you may have to go to court, and the banks certainly won’t make it easy for you. If you’re after an easy ride, or can’t be bothered, fine – let them keep YOUR money! It’s up to you ….

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I’d suggest there are two things you need to consider before commencing this process,

  1. Can I see this through? Have I the patience and motivation?
  2. Is it worth it? If you’re a ‘model’ customer, very rarely overdrawn then possibly this isn’t for you; however, if you’ve been charged for being overdrawn, bouncing cheques/Direct Debits/bills, misused your cheque card etc. then you certainly have a claim. Only you can decide however if it’s likely to be worth it, be that on matters of principle, likely reclaimed amount or whatever.

It’s worth checking elsewhere on here to see my regular updates of my refund claims, where I will illustrate the process by means of ‘real-life’ examples – i.e. my cases!

Please be aware this process may change in time, but it’s imperative that it’s followed fully and in turn – any mistakes could prove costly!

One thing this isn’t, is a ‘get rich quick’ scheme – average time-scale for settlement is two-three months.

Be aware the bank will lead you a ‘merry dance’ but the law, and statistics are on your side – there have only been TWO cases that have failed, and both of these were matters of preparation errors by the claimant, NOT a point of law.

The general consensus is that the banks will try and put you off at every step, even registering an intent to defend in court, but ALMOST ALWAYS settle at the eleventh hour, claiming all charges are repaid so there is no case!

However, for now, this is a very brief ‘pen picture’ of the stages of the claim process……

SET UP ALTERNATIVE FUNDING

  • Although in some cases banks have retaliated against claimants and closed their accounts, this is gradually being stopped by the Financial Services Ombudsman. However, it is well worth establishing another current account to use as a contingency if there are any problems with the account you’re reclaiming charges from.

EVALUATE CHARGES (up to 40 days)

  1. You can claim for SIX years, so if you haven’t kept ALL statements you will need to contact your bank or building society using what’s known as a Subject Access Request (S.A.R.) – under the Data Protection Act. You will need a template letter (available as free download – I recommend Consumer Action Group ) which you can customise with your own personal details – e.g. address, account numbers etc.
  2. You will need to include a cheque or Postal Order for £10, but this is reclaimable if you successfully complete your claim.
  3. The bank have 40 CALENDAR days to respond, or you can file a complaint with the Ombudsman for non-compliance. In my experience, you can often phone the Data Protection team for your bank, after allowing a reasonable time (25 days say), if you haven’t received your statements and request an abstract of charges. This is basically a computer printout of just your charges, amounts, and date applied – which is after all the only real data you need.
  4. Please note though if you are intending claiming for contractual interest (i.e. suggesting the bank repays you more than just what it’s taken off you in charges & interest, theoretically as they are ‘borrowing’ money from you that would have normally been in your account for you, and thus charging them their unauthorised borrowing rate) you WILL need your statements.
  5. Finally, you need to prepare a SCHEDULE OF CHARGES – i.e. all the charges, interest, and fees the bank have taken off you that consider should be refunded. This is made relatively simple using spreadsheets available from the Consumer Action Group website, but you MUST register with the forum there to download.

PRELIMINARY LETTER/REQUEST FOR PAYMENT (up to 14 days)

  • Okay, so you’ve worked out the bank have robbed you blind, you know how much – so now you ask for it back, nicely! Again, you use one of the templates from the usual resources.
  • In this letter, you will enclose your SCHEDULE OF CHARGES, and the template basically is asking the bank politely for your money back – don’t be disappointed if they say NO, they often do!
  • If by some stroke of luck, they agree – even if they don’t, keep checking your bank account – then congratulations, start your celebrations!
  • Allow them their 14 days to reply, then if you haven’t heard from then you can either file a non-compliance (as above) or proceed directly to the LETTER BEFORE ACTION.
  • If they do reply, but politely decline your request for a refund, proceed directly to the LETTER BEFORE ACTION.

LETTER BEFORE ACTION (up to 14 days)

  • So they refused you, hey? Don’t worry, they do that to almost every single letter they receive – but don’t lose heart, you’re almost there, they’re just toying with you hoping you will give in – but you won’t, RIGHT?
  • Here’s what you do – log back onto the Resources websites, download the LETTER BEFORE ACTION template, and send it to them – they now have 14 days before you’re going to take them to court.
  • There’s a small chance they MAY offer you a settlement, but it’s up to you to decide if you wish to accept, The wise move is to accept it as a PARTIAL SETTLEMENT and inform them accordingly, but still proceed with your claim for the remainder. As you may guess, they’re trying to fob you off and call you’re bluff, although it’s more likely these days – given the sheer volume of claims they’re facing – that they would more likely just refuse totally in the hope you will give up – but you’re even more determined to do the robbing gets hey?
  • Although it may be tempting to just jump directly to court action, it’s imperative the LBA is sent and they’re allowed 14 days – a judge could throw a claim out if you have omitted this stage, as you’ve not afforded the bank an opportunity to repay you once you’ve notified them of your intentions to take them to court,

FILE A CLAIM WITH THE COURT (average 6 weeks)

  • Now for the messy bit, but this isn’t anywhere near as bad as it sounds, plus the endgame is in sight.
  • Firstly, you file your claim with the court – either local County Court or online – and submit all the relevant information, which is basically the claim form and your SCHEDULE OF CHARGES, You WILL have to pay court fees, but don’t worry – these are refundable if you succeed (very, very, very likely) and you may also be entitled to financial help if you’re on benefits, etc. An added bonus at this stage is that you can ADD STATUTORY INTEREST at 8% to your total claim now it’s going to court – even more money for you!
  • Secondly, wait for the courts to confirm with you that your claim has been SERVED to the bank (i.e. they receive formal notification you intend to take them to court for refund of the bank charges they effectively stole from you!). This is probably the first time the bank take you serious, despite all the warning signs to date – they really do feel people get scared and ‘bottle it’ (sadly several do). although you won’t, WILL YOU?
  • Once the bank acknowledge receipt, you will be informed of a court date – up to which time the bank (or their solicitors) MAY inform you they intend to defend. Don’t worry at this stage. it’s just another scare tactic as you may have guessed!
  • If the bank do intend to defend, you will have to submit more paperwork, basically an ALLOCATION QUESTIONNAIRE but this is nothing to worry about, you can always check the BANK CHARGES FORUM at Consumer Action Group, as you can at any stage of course!
  • Now is ‘squeaky bum’ time you may think, it’s just a case of waiting & (hopefully not) worrying. Well, fear not – think of it this way. If the bank had nothing to worry about, they wouldn’t be making it so difficult for you, would they? Trust me, the law, and thousands of previous cases are on your side. If you’ve followed the process correctly, it’s almost just a case of planning how to spend your winnings. One thing you must do leading up to the court date is to keep checking your bank – the bank normally refund you in increments, often in the last few days before the court date – then they can file that their is no case, as they have refunded you in full.
  • If you do have to go to court, and you either been refunded in part – or not at all – ensure you are fully prepared, and then just go for it and have your day. If you’ve prepared properly, you have nothing to worry about at all.
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