| Bank Charges are one of the major sources of | | | | in a helpless position. Single parents, pensioners, |
| income for banks. All banks impose charges on | | | | students and hardworking people in general suffer |
| certain failed transactions e.g. a bounced cheque, | | | | greatly. The charges can add up very quickly over |
| exceeding overdraft limits, returned direct debits etc. | | | | the years and can amount to thousands of pounds. |
| Indeed, banks are allowed to impose charges that | | | | If you feel that you have been unfairly charged by |
| reflect the amount of work undertaken by | | | | your bank then you can claim yourself or seek some |
| administrative staff in certain situations such as | | | | professional help. When trying to get the right |
| customers going into the red or handling a cheque | | | | amount of compensation it is always worth seeking |
| which cannot be cleared due to insufficient funds in | | | | guidance and allowing skilled representatives to handle |
| the account. If a cheque or direct debit has to be | | | | the entire claims process. Dealing with bank letters |
| returned, the bank can charge for the cost of this | | | | and fighting for the correct compensation takes up |
| process. However, any such charge must be | | | | time and effort. Such energies are often spent on |
| reasonable. Banks who regularly impose hefty | | | | earning a living and looking after the family. |
| charges between £25.00-35.00 on a customer | | | | People will often be told that a simple letter of |
| who is £1.00 overdrawn cannot be said to be | | | | complaint to a bank will get you the desired result. It |
| acting fairly. The Office of Fair Trading (OFT) | | | | is not always so straightforward. Some banks are |
| declared that these charges were unfair and | | | | familiar with standard complaint letters and will often |
| unreasonable. It is a scandal and many have called it | | | | reject complaints. Compliance officers are employed |
| daylight robbery. Banks when asked to produce | | | | by banks to defend claims. Often, if the banks do |
| documents justifying the charges have failed to do | | | | decide to compensate, there may a payment as a |
| so. However, it is likely that the banks will have | | | | 'gesture of goodwill'. Accepting such offers is simply |
| gathered some ammunition to produce at the High | | | | giving the bank the upper hand. Customers deserve |
| Court in the test case on bank charges in January | | | | to have all of their charges refunded with the proper |
| 2008. The test case relates only to current accounts | | | | interest. |
| and not business accounts. The brutal truth is that | | | | The Financial Ombudsman Service (FOS) which deals |
| unfair bank penalty charges have been imposed on | | | | with rejected claims does not help on how to |
| millions of people. It has been a merciless punishment | | | | present a claim. How a case is put is very much |
| on people who may have simply overlooked their | | | | down to the individual. The FOS will simply assess a |
| current account status or had a late payment of | | | | claim on the arguments it is presented with. In such |
| wages. Excessive charging has resulted in many | | | | cases, it is always worth getting professional help |
| people getting into debt which also has drastic | | | | when fighting large financial giants for compensation. |
| consequences in credit ratings. | | | | Claiming against your bank will not result in your |
| The High Court will no doubt be asked to consider | | | | account being closed. Under section 14 of The |
| whether the charges are fair. The penalties which can | | | | Banking Code, the Standards Board advised banks |
| be imposed, and which no doubt may be in the | | | | "to ensure that they do not make a disproportionate |
| individual contract between customer and bank, | | | | response to customers claiming back these 'default' |
| relate to a range of services following troublesome | | | | fees and treat the customers sympathetically and |
| banking. However, the OFT's investigation confirmed | | | | positively.' |
| that banks were imposing illegal and unfair charges. It | | | | Furthermore, any threat to close an account would |
| is widely thought that the High Court will rule in | | | | be contrary to the Financial Services Authority's |
| favour of the customer. | | | | (FSA) principles on treating customers fairly (TCF). |
| Recent research has suggested that about 41 per | | | | Specialist organisations fearlessly fight on the behalf |
| cent of people do not know the interest rates | | | | of the consumer to claim back excessive penalty |
| applicable to an unauthorised overdraft. Many more | | | | charges. Complaint letters will be carefully drafted and |
| have simply swallowed the hefty charges imposed on | | | | may include legal precedents which help in the battle |
| them without even a letter of complaint or fight. It is | | | | to get the right amount of money. The workload |
| also worth noting that 19 per cent of people are | | | | involved in tackling bank and credit card companies is |
| always overdrawn. These surveys also show that | | | | substantial. Dealing with phone calls, rejection letters, |
| overdraft charges of £4.7 billion were paid by | | | | drafting statements of claim, taking rejected claims |
| 43 per cent of current account holders last year. | | | | to the FOS and calculating correct compensation is a |
| Credit Card / Store Card Charges | | | | meticulous process. Specialist compensation firms also |
| With the increasing popularity of advantages | | | | have useful contacts such as Solicitors and Barristers |
| associated with credit cards and store cards, almost | | | | who can assist and advise on any complex areas. |
| all banks and big store chains have come out with | | | | Such specialist firms also can help with all other types |
| their own cards for people to shop, withdraw cash | | | | of unreasonable charges. As well as helping reclaim |
| and purchase online. The British enjoy paying by | | | | bank account charges for both current and business |
| plastic and the trend to purchase on credit will | | | | accounts for the last 6 years, there can also be |
| continue for quite some time. However, there is a | | | | claims for reclaiming credit card charges, mortgage |
| price to pay for such short term financial cushion. | | | | exit fees, mortgage arrear fees, Payment Protection |
| Credit card companies and banks charge grossly | | | | Insurance (PPI) and other penalty charges. |
| handsome penalties when customers fail to make | | | | Most compensation specialists are registered with the |
| their minimum repayments by the due date. Many | | | | Information Commissioner which means that they |
| card providers charge annual fees in the subsequent | | | | abide by Date Protection rules. This provides a safe |
| years although there may have been a waiver of | | | | secure environment for your confidential information |
| such a fee in the previous year. High interest rates | | | | and one can rest assured that information will not be |
| are also imposed when someone goes beyond the | | | | passed to third parties without consent. |
| allowed limit. | | | | The majority of firms handling such claims for |
| The Office of Fair Trading found that the charges | | | | compensation operate on a no win no fee basis. If |
| imposed on credit charges were also unfair and | | | | successful, the firms charge a percentage of the |
| unreasonable. It was a long battle but the victory | | | | compensation won and this will or will not include |
| was an important one for the consumer. Credit card | | | | VAT. These firms will only charge you for their |
| charges can be reclaimed and it is worth | | | | services once they have successfully claimed back |
| remembering that the High Court test case will only | | | | from the bank on your behalf. In the event that the |
| focus on bank current accounts and does not affect | | | | firm fails to get back anything from the bank (though |
| credit card or loan charges. | | | | chances are very low) you will not be charged a |
| How to Claim them back | | | | single penny. There is nothing to lose and plenty to |
| There is no doubt that these charges result in many | | | | gain. |
| people heading into more debt and finding themselves | | | | |