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Dom Littlewood looked at the current state of play regarding bank customers reclaiming their overdraft charges.
In 2007, customers complaining about unauthorised overdraft charges being unfair were often given goodwill settlements by the banks in order to stop cases going to court.
The Office of Fair Trading brought a test case against the banks in July 2007 to get a legal ruling over the fairness of unauthorised overdraft charges (this includes unpaid direct debits and cheques).
So far, all that has happened is that the High Court decided that it was within the OFT's rights to consider the fairness of bank charges under the Unfair Terms in Consumer Contracts Regulations, and the banks then appealed that ruling.
The appeal finished in November 2008. The OFT expects the result of the appeal imminently, but there is not a definite date.
If the ruling goes against the banks again, they still have the right to appeal to the Law Lords, and after that, the European courts - so it could rumble on for years without claims being dealt with.
Can you still claim?
All claims have been put on hold until the court cases and investigation are finished. It is estimated that there are currently 750,000 claims on hold, with £1 billion at stake.
But Dom believes it is still worth writing a letter to your bank starting the reclaiming process, as you'll be in the queue, the banks will be obliged to keep you updated on how the court proceedings are going, and it may protect you from missing out if for any reason payouts start and then stop again before they get to your claim.
You can download a template of the letter here. And there's also more from the BBC site on how to claim back penalty charges here. See also a BBC News Q&A on the bank charges test case.
For more information on the test cases see:
BBC News: Frozen overdraft claims revealed
Comments
My bank, the Shabby, said I wasnt allowed to claim in court and any claim submitted would be rejected because the courts agreed not to accept them, I do not believe the call handler made this up, obviously they were told to tell customers this. Reality is, the courts will accept your claim but it will reside on hold for the time being. Remeber, you can only claim back 6 years from date of claim, the effective date of claim being when your claim is submitted at a civil court. So if you delay, and in mor erecent years have been in better credit at the bank and not incurred somany charges you coul dmiss a window to claim back to when, historicaly, yu were being charged more often. Fact is, the banks staff wer emisleading customers about thier statutory rights. Firthermore, when a complaint wa smade abot charges and othe rmatters, despit ebeing told £230 was unacceptable in full and final settlement (charges were over £2000) the bank despite being told not to, decided to send a cheque, with a covering letter saying the money was for, by way of appology for toruble caused, but tthen a sentence said, ''in full and final settlement of all maters of complaint''. The bank had been told the cheque shold not be sent to the customer but it was. Most likely the cheque and wishy washly letter was sent in hope the customer would think it was simply a goodwill gesture (even though the customer had written rejecting the offer and telling the bank not to send the cheque) in th ehope the bank would secure the prmeise of a full settlement. Be carful and read all letters from the banks!!!! Lets see what the Abbey have to say about thier conduct and if they decide to apply to the blog!
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If you stay within your means you are never affected by bank charges. Why should the taxpayer bail out those people who spend too much.
The remedy is simple. Do not exceed your income!!!
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Dom,
Fantastic work, I had begun to think that this issue had been brushed under the carpet.
I believe that it is important for the banks to face up to their faults, and the over-charging of customers has been a major fault.
Paradoxically this may a good time for the banks to repay customers, financially and in good faith. It may go someway to reconnect banks to society, and I fully encourage all the pressure it takes to make them see sense.
P Flannery.
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when my bank asked me for a chat to discuss my account they disided that the best thing they could do for me was to close all my accounts ansking my for the £2,100 that i owed them. i informed them that all that money was made up of unfair charges and put in a claim.totaling £2,300 i got the standard letter back saying all items where on hold untill the court cases had been sorted.they still got a ccj against me and placed a charge on my house strange that the law protecting them is not also protecting me
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My case has been reviewed and confirmed as one of financial hardship, by the consumer credit counselling service, LLoyds TSB, have reviewed the situation but since the FSA have not concluded that they are required to favour the consumer they therfore intend to do nothing regarding my claim. The Financial Ombudsman in this case has confirmed that they are in agreement with the banks over financial hardship in that it is still open to interpretation, and that they can do nothing, (I have this in writing), so why do reporters continue to mislead those in financial hardship.
nigel.northampton
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My bank is Lloyds Tsb and i went onto google and typed in Bank Charge refund companies and came up with Investor Compensation. All I did was fill out one of their claim packs and they sent a letter to Lloyds Tsb. 3 months later i received a letter from lloyds explaining the test case etc but they would allow customers in financial hardship or difficulty to get a decision in 12 weeks which is a load of cack, because they knew they would wait for their appeal.
That was back in December and we are now in February. i received another letter from Lloyds TSB again explaining about the test case, but that they have forwarded a Common Financial Statement for me to fill out and they could well settle the case within the next 2 months. So as the show said get your claim in early im the lucky person out that lot who could be sorted as soon as end of feb/march.
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No Credit FYI
Get with the real world will you!
There are thousands of people who like me who have spent money they have not had..and still today I know of lots of people still using Credit Cards, and overdrafts and loans..!
It is an ongoing issue with the society of today..! Everyone wants everything they see, and have to have it regardless..those with families, have to make sure they don't go without. Many people have cars to pay for, Mortgages and many are struggling to meet their payments often getting into their overdrafts and many are making payments with Credit Cards..!!
This is a sign of the times..about time people reaslised what really goes on..
I however have learnt the hard way!
I am paying back my debt and I do not see why having an overdraft should allow the bank to imply automated charges on your account as this is what they are..!
Even though I had an agreed limit and stuck within that the charges still occurred.
I have learnt from my mistake and I am sure many others have too !
Rachel Cale
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Just curious - what do people thi k is a fair charge by the banks for people taking unauthorised amounts from the banks?
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I have been in correspondence with my bank, the Alliance and Leicester for a very long period and it has been like wading through treacle. Following the article on reclaiming bank charges I folllowed the advise on gathering as many statements as possible to estimate chareges that have been levied.
Imagine my surprise at finding that all of my on-line statments at A&L dating back to June 08 no longer show ANY bank charges!
As a case in point July last year had £280 in charges applied (for which I have an earlier downloaded statement) compared with zero showing on line now.
Now can the banks get away with this and is it legal? At best they are deliberatley hiding information to throw people of the scent and at worst it verges on deception!
Interested to hear feedback on this one.
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''If you stay within your means you are never affected by bank charges. Why should the taxpayer bail out those people who spend too much.
The remedy is simple. Do not exceed your income!!!''
I beg to differ. I have never used credit, but one month my bank decided to take a £5 maintenance fee out of my account, which put my balance at -£2.50, and prompted them to charge me £200 in unauthorized overdraft fees!
This is unethical, and as a taxpayer, I like to think my taxes go towards making society a fair and just place where we don't need to worry about being victimized by corporate giants.
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Thanks for the advice. I've just asked my bank for the six years worth of statements.
I then thought to ask them if their "system" could not just tell me how much it had charged me over the last six years. Not a calculation I would expect to be that difficult for a "banking system". Sadly the computer said No.
At which point the very helpfull assistant on the phone informed me that seventy two bank statements, of two to three pages each, would be in the post in three to five working days.
How much greener would it have been to tell me how much they charged me? Or email me a spreadsheet? How much paper are they wasting by making us calculate it ourselves?
Thanks for the tips Dom
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WE will b trying to get back charges, after being charged £140, for an overdraf of £100. Withe LLOYD/TSB.
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!!!!!!!!!!!!!!!!!!!!money, money, money!!!!!!!!
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If it only costs the banks lets say £1.50 - £2 to send a letter to say you have gone over your limit, then why the hell do they think they can charge us £25, £35 or even £40!!! My opinion bank charges are a total scam!!!!
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post 14:
i totally agree with you.
bank charges are a total scam!!
££££££££££
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Nice work on the info. One question though, are the details for filling in the n1 claim form provided in the link up to date?
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parden
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- AMBR - !!
I agree with the bank charge situation as well. otal scam.
Has anyone used or are using AMBR -
Alliance and Mutual Bank Refunds (AMBR) to solve their charges problem?
I am having problems contacting them... Have they vanished?- as all numberS on their wesite do not work. Could anyone tell me if they have had any contact or know what's happening with the firm?
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I think what the bank charges for going over your overdraft should be proportinate to the amount. I have been charged £35 for going £2 over my limit. This is disgraceful. I will certainly be claiming my money back when it is all sorted out in court. Think the banks are just dragging out the inevitable but the financial ombudsmen don't seem to have much clout anyway. Sick of complaining about my ex-bank (Halifax) they are rubbish and blatently ripping me off.
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In June 2007 i wrote a letter to my bank (Lloyds TSB) requesting a copy of my bank statements or other relevant information that would show any bank chaqrges accrued over the last 6 years. Within this letter a enclosed a cheque made out to the bank for £10 to cover any admin costs.
Later that same month the cheque cleared frommy account. I have know been waiting for about 21 months for the information that i requested and which as far as i know had to be supplied within 1 month of the initial request.
Just think of the charges the bank would have demanded from myself if i was £10 overdrawn for the last 21 months. I am very annoyed by this situation and i dont really know what to do about it, could somebody please offer some advice.
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Barclays Bank introduced a reserve fee of £22 for 5 days usage last August saying that they had changed the charges system due to the so called unfair charges. Then in Febuary they introduced advanced notification of charges and instead of taking the charges out at the time they care now storing them up and notifying customers in their starement and the day when they will be debited. Again saying that this is fair. So far my son and daughter-in-law since 27th Februaury todate have had £656 taken out in reserve charges/guaranteed payment charges. Also if you go over your reserve limit you can be charge £8 per unpaid/paid fee of up to 5 times per day (but no reserve fee), and they think that this is fair!!!! This is totally disgusting. No wonder they can award themselves fat cat bonus's.
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Its july 2009 I have just found out that someone got a cheque for £300 a few days a go can I still claim. using the templates from February.
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Under the Consumer Credit Act (CCA) if a loan or credit card agreement is missing certain important terms, or they are written incorrectly, then borrowers may not have to make any remaining payments.
In some circumstances people are not aware of this contract between them and the second party, find them in a position where they are held accountable without consent and have to pay out more than they had expected to. In situations like these you can reclaim these expenses if you follow the right channels that would lead to a successful result, there are certain guidelines in which you have to be within to be able to concede a successful reclaim of your rightful money, jus go on to cancelyourloan.co.uk for a free check to see if you are eligible for a reclaim and our team of solicitors will help you get your money back.
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What has happened to the company AMBR? - Alliance & Mutual Bank Refunds - Are they event legit?
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