How To Reclaim Those Bank And Credit Card Charges

If you have already paid charges/penalties for an unauthorised overdraft, bounced cheque or unpaid direct debit then you are likely to have a claim for compensation going back as far as six years.

Why Can I Reclaim My Bank Charges?
A contract between you and the bank must be drawn up within the law and be fair for both parties, for the bank to fine you for going overdrawn, bouncing a cheque, going over your overdraft limit or returning a direct debit is okay providing the fine is reasonable, i.e. a few pounds for the cost of a computer generating letter and postage, what not is acceptable is for the bank to fix the fine at £35, imposing a penalty. This is seen as the bank making a profit from your demise and the fine does not reflect the cost of the work involved by the bank, in other words it becomes a penalty, which is unenforceable by the courts.

Has There Been A Court Ruling On This?
Not yet, the general feeling in the industry is that the banks and credit card companies do not what a precedent as this could open the floodgates and instead of paying millions out to individuals that enter a claim the banks could be stumping up billions! Also no bank wishes to reveal their internal costs of how they trade to the court in an attempt to prove their case as this could be pounced upon by another banks, their competitors.

I Ffeel I Have A Claim, Where Do I Start?
You will need to get hold of your statements for the past 6 years this could be done by either telephoning the bank or writing a letter to the bank Data Protection Officer enclosing a payment of £10, the bank has up to 40 days to respond. You can also claim on accounts that have been closed, just remember not more than 6 years. See for template letters and bank DPA addresses.

The Bank Has Failed To Send Me My Statements Within The 40 days, What's My Next Move?
Either telephone them or write a letter threatening to report them to the Information Commissioner for breach. Offer them 7 more days to respond, if you write a letter keep it for the Information Commissioner.

What Can I Do If The Bank Refuses To Acknowledge My Claim Or Just Dismisses It?
You will need to write again and threaten proceedings through the small claims court. Court action will cost you around £80 if your claim is below £5,000, which you will get back once you win your case.

Can I Add Interest On The Money I Am Claiming?
Yes, the suggested guide is 8%; in a lot of cases the banks will offer you a settlement figure minus the interest. We have an interest calculator on the website to help you.

What if I win my case and the bank still refuses to pay?
Send in the bailiffs; see my website for more details on this.

Can a bank close down my account because I have entered a claim?
In theory yes they can, however, the Financial Ombudsman Service, FOS, recently warned the banks that they are not entitled to close the account of customers that have complained about unauthorised charges.

Where can I get help to write these letters to the bank?
We have all the templates that generate the letters for you as well as the much acclaimed interest calculator, all for free. We also feature a more in depth article along with debt advice, all can be found at

Can I employ a firm to do this for me?
Yes. There are several companies on the internet that will do this for you. They usually ask for a percentage circ 20-40% of your claim as their fee so in effect they will charge you for their services. So if you received £2,000 back the firm acting on your behalf would take £600 in fees if the ratio was 30%.

Does this over charging also apply to Credit Cards?
The same principle will apply for reclaiming excessive credit card penalties. The Office of Fair Trading, OFT, ruled last year that the charges should be capped at £12. Use the letters detailed below in the same way. One point to bear in mind is that when working out your claim it will be prudent to deduct £12 from the amount of every claim as the credit card companies will cite this amount in any pre court settlement.

In the preparation of this article, every effort has been made to offer the most current, correct and clearly expressed information possible and it is intended to afford general guidelines on matters of interest. Accordingly, the information in this article is not intended to serve as legal advice. Therefore, no responsibility can be accepted by, for any loss occasioned by a person acting or refraining from, acting on the basis of this article. Users are encouraged to consult with professional advisors for advice concerning specific matters before making any decision.

All contents copyright © 2007 Limited

Return to Finance menu