Top 10 Steps To Reclaiming Your Bank Charges

1.Know Your Rights

When a person opens a bank account, or credit card account they are entering into a contract with the bank. Going overdrawn or any other action that causes the bank to charge you is considered as a breach in contract, which is know as liquidated damages, and the courts can enforce payment. However, the charges must reflect the actual costs to the bank due to breach of contract. Anything more than that and it becomes a penalty. This is unenforceable by the courts. The argument that the charges exceed the customers losses and are not enforceable by law is covered in the Unfair Terms in Consumer Contracts Regulations 1999, Unfair Contract Terms Act 1977 and at Common Law. Some banks argue that charges are a fee for a service, however if this is the case then they must be reasonable under S.15 of the Supply of Goods and Services Act 1982.

2.Spot Excessive Charges

You can claim back any charge that the law would class as a penalty. Charges to look out for are charges such as £20.00 for a letter to be sent out informing a customer that they have gone overdrawn, or £30.00 for a bounced cheque. Quite clearly the cost to the bank is nowhere near these amounts.

3.Work Out What You Are Owed

Go through all of your bank statements and highlight the charges that you consider to be excessive. You need to be reasonable about these charges as it may eventually go to court, and there is a chance that the courts will rule in the banks favour if you start claiming back charges that are in fact fair and reasonable.

4.Write And Ask For Your Money Back

Using our template letters, send your bank a letter requesting your money back. After a day or two give them a call to follow up that letter and make sure it has been received and dealt with. You may be surprised at what a difference persistent correspondence makes. Make a note of all dates of when you sent letters, times of phone calls, and names of the people you spoke to.

5.See What The Banks Have To Say

The bank should reply within 2 weeks. If the bank does not reply, or gives a response stating that it is dealing with your request and will be in touch with you shortly, contact them straight away informing them that 2 weeks has passed, and that if you do not hear a definitive answer within 14 days you will start court proceedings.

If the bank offers you as partial refund refuse it.

If the bank sends you a letter telling you that you are not entitled to reclaim your bank charges and that you are mistaken, take no notice of it. You are entitled to reclaim your charges, and banks know this. Many banks have taken to sending out letters such as these in order to call your bluff, thinking that you won’t take them to court.

6.Learn About Court Action

You are starting to move away from letters and moving onto legal action. Try visiting the following websites and have a look through what people have to say. Their experiences say that action works.

[http://www.bankchargeshell.co.uk/]

http://www.consumeractiongroup.co.uk/bag.php

You need to be aware that you will incur the costs of the court proceedings, but unless your claim is over £5000, in the unlikely event things will go to court, your claim would be heard in a small claims court where you would not be held liable for the bank’s legal costs.

It may be a good idea to open a second current account with another bank, as it has been reported that a bank may try close your account after such actions.

7.Make A Claim

There are two ways to make a claim. The first is by going to the county court in person. The second is a much more comfortable way from your own computer via the courts system’s Money Claims online service. Save the details as you go, and pay the fees which range from £30 – £120 online.

You should also register at the following website for support and advice on making a claim:

http://www.consumeractiongroup.co.uk/

8.See What The Bank Does

The bank may now repay your entire charges. If the bank ignores your claim, after 14 days you will win by default. If the bank responds in acknowledgement it has a further 14 days to build a defence. Again if the bank fails to respond after the second fortnight you win by default.

If the bank enters a defence (which it will usually do last minute), read on…

9.The Bank’s Defence

It is very unlikely that things will go this far, but if they do you will receive a court questionnaire which you must fill in and return to the court within 1 week. Send a copy to the bank also to show them that you are serious.

Pressure groups say that this is usually the point where the banks will back down and not turn up to court. You will win by default.

If in the event that the bank is really playing hardball and turns up, do not worry. There have only ever been two cases that have resulted in legal action where the courts have won compared to hundreds of thousands of claimants winning the cases.

10.Don’t Let History Repeat Itself

This is the most important part of the guide. The best way to reclaim your charges is not to get them in the first place. If you keep on top of things and don’t put your accounts in a position to be charged then all of this hassle can be avoided. Banks provide financial advisors which can discuss your financial situation and help you avoid such situations.