Claiming Bank Charges Back - FAQ
Why are Bank Charges Illegal?
When you go over your overdraft limit, or bounce a cheque for example, the bank charge you a penalty charge, usually around £30 for breaching your contract.
However, the "Unfair Terms in Consumer Contracts Regulations (1999)" state that penalty charges are not permitted to be a profit making enterprise for any business, and if the penalty charge is higher than its administrative cost, the charge is illegal.
When you go over your overdraft, or there aren't enough funds for a direct debit to go through so it has to be reversed, everything is handled by a computer automatically, so the costs to the bank are negligible.
The bank commission of BBC’s “The Money Programme”, which included two professors of banking, and a former Natwest executive, estimated that the highest amount that the banks could justify charging to cover their costs was £2.50 - £4.50 (and that’s being generous!).
Can I claim back Bank Charges myself, or do I need Professional Help?
You can easily claim bank charges back yourself, and hundreds of thousands of people have successfully done so, from all walks of life. Everything you need to do is documented on this site.
However, if you are daunted by the thought of taking the bank to court, or simply don't have the time to do the work yourself, we've partnered with Claims Financial, a fully regulated claims company can claim back your bank charges on your behalf.
Claims Financial can also help you to claim back charges on a business bank account, providing that you have full sets of bank statements for the relevant period, and the business has a turnover of less than £1 million.
To start the process, fill in the simple application form, and a Claims Financial representative will contact you to talk over your claim.
How many years of Bank Charges can I claim back?
You can claim back up to the last 6 years worth of charges, or 5 years worth if you live in Scotland
Will the bank put a black mark on my Credit File if I claim back my Bank Charges?
No, the banks are not legally allowed to put anything on your credit file to do with claiming your charges back.
Can the Bank close my account if I Claim my Bank Charges back?
Yes, they can legally close your account at any time, and have been doing this more frequently lately in order to put people off claiming.
If you don't use the account you're claiming for, or its already been closed, then you won't have a problem.
If you're claiming back charges on your main day to day account, its a good idea to have a backup account with another bank in case your account is closed. Also, make sure if you have credit with the bank that you can pay it back if they close your account.
Can I claim back my Bank Charges from an account that was closed?
Yes, even if an account has been closed in the past, you can still claim back your charges. In fact this situation is preferable in a way, as the bank can't retaliate in any way by closing your account for example!
However, the deadline of being able to claim back 6 years of charges starts from the current date, rather than the date the account was closed. So, for example, if your account was closed 2 years ago, you could claim back the previous 4 years of charges before the account was closed.
By Claiming my Charges Back, am I forcing the Banks to introduce fees to run accounts in future?
NO! The banks would have you believe this, and are talking about introducing fees to run accounts in the future ie you pay a monthly or yearly fee just to have an account. However, the banks make huge amounts of profit, and will still be in profit even if everyone claims back their charges.
Even without taking money from you in the form of charges, they are still profiting from you, by paying you a small amount of interest on the money you have deposited at the bank, whilst loaning out your money to others with a much larger rate of interest and pocketing the difference!
How long will it take to Claim back my Bank Charges?
This depends on a number of factors, such as how quickly you respond to the bank, how quickly they respond to you, and whether you already have your last 6 years of statements available.
If you have to apply to the bank for your statements, a rough timescale will be:
Time to get your statements from the bank - up to 40 days
Time to give the bank to reply to your claim for charges - up to 14 days
Time to give the bank before taking lodging a claim with the court - 14 days
Time to give the bank to prepare a defence against the claim - 14 days
So you are looking at around 3 months, less if you already have your last 6 years of statements, to skip the longest part of the process which is getting copies of your charges from the bank.
Do the Deadlines for the Bank to respond include Weekends
Yes, they do! For example, once you have sent a letter to the Bank asking for your charges to be refunded, they have 14 days to reply. Unless you specifically stated 14 working days, then the 14 days includes weekends.
The Bank are trying to charge me for copies of my Statements? Can they do this?
They can, and most banks do, with charges from £1 to as much as £5 per statement, which could lead to a bill of over £70 for six years worth!
However, you can get around this by using the Data Protection Act to do a "Subject Access Request" to get a record of the charges on your bank account, which costs a maximum of £10. If you ask for this, the banks usually give you all of your statements, and return your payment to you.
See Step 1 - Requesting your Charges - Data Protection Act for more information.
Can I add interest to the Bank Charges I am claiming back?
You can only legally add interest to the charges, at the statutory rate of 8% once the case has gone to court and you have won, and the judge will order interest to be paid.
However, you can ask the bank for interest at the above rate when you ask for your charges back, but bear in mind that they do not have to pay it. At best, they will pay you the interest, but its unlikely. They will however, make you an offer usually to refund part of your charges back, and this is likely to be higher if you show you are serious and have added interest to the charges, than it would otherwise be.
It also acts as a reminder to the bank of how much extra they will have to pay if the case does go to court.
Can I simply telephone the Bank, instead of writing to them, to ask for my charges back?
You can do this, and there are reports on the internet that people have got their charges back after talking to the banks on the phone, but its not advised. Because it's over the phone, you have no record of whats been said, and they can use this to delay the process, and you have no evidence if you have to take the case to court.
If you do everything in writing, its more formal, and you have written evidence of everything sent to and received from the bank.
Do the times stated start from when I send the letter to the Bank?
No, the times stated that the bank have in which to respond, start from when the bank receive the letter. This is why you should send all correspondance to the bank by Recorded Delivery, so you can be sure the bank has received it, and also know when they received it, so you can start counting down. If you send the letters by Recorded Delivery you can track them using the Royal Mail Tracking Page.
The charges the bank added to my account sent me into Debt and I defaulted on the Account. Can I have a Default Notice removed from my Account?
Whilst, the banks are not legally obliged to remove the default notice, if you can show that you went into default because of the charges applied to the account, you can push them to remove it, and a section for this is included in the template letter on this site. In the end, it comes down to "If you don't ask, you don't get", and you can give it a try.
What happens if I have to take the Bank to Court?
If you are lodging a claim in the small claims court (for claims under £5000), then you can file your claim over the internet, as documented in our guides on this site. This costs up to £120 which you can get back from the bank if you win, or if they back down before the case is heard.
If you are receiving state benefits, you may be able to get help with the costs of the claim.
