Claim Bank Charges Back - Helping you to reclaim Unfair Bank Charges!

It's not just personal bank charges that can be claimed back, you can also claim back business bank charges too!

Because businesses accounts involve much larger sums of money than personal accounts, and many businesses work from an overdraft for their first couple of years, the associated penalty charges can be much higher, and can often run into tens of thousands of pounds when added up for the past 6 years!

Case Study - Alan Abrahams and Valerie Knight-Gibbons claim back £25,000!

As an example of how much these charges can add up to, take a look at the case of Alan Abrahams and his partner Valerie Knight-Gibbons. They ran the eight bedroom Castle Hotel located in the North York Moors National Park. During the foot and mouth outbreak in 2001, their business was badly hit as the number of bookings they received dried up. Rather than discussing how they should proceed, Natwest allowed them to keep on expanding their overdraft, whilst hitting them with huge amounts of penalty charges. Thankfully for them, their fortunes turned when they closed the hotel, and developed it into a number of luxury apartments which allowed them to pay off their debts.

However, when they calculated how much they had been charged by Natwest, they were staggered to find that they could claim back over £25,000! After the Financial Ombudsman failed to help them recover their charges, they turned to the courts, and before the hearing Natwest settled with them for £25,000, just £2,000 short of the actual amount they were claiming. Alan commented:

"It's not the money, it's the sense of achievement, getting something back that was taken from you. I'm so happy."

Many small businesses have been charged huge amounts in fees unlawfully over the years, do you know how much your business has been charged?

Business Bank Charges and the Law

Unlike personal bank charges which are covered by Consumer Law, businesses fall under what is known as "common law", and as such there's some differences between the rules affecting personal and business charges.

When you apply for a business account, you effectively sign a contract with the bank. If you go over your overdraft limit or bounce a cheque or direct debit, you break your contact with the bank, which states you will keep your account in good standing. As a result, the banks are legally allowed to impose a penalty charge. However, there are strict rules regarding the amount that the bank can charge you.

Although banks can impose a penalty charge, it must reflect how much it actually costs the bank when you breach your contract, and the banks are not allowed to profit from these charges. Because modern banking is completely automated, it actually costs the bank very little when you go over your limit, and experts have estimated the actual cost to the bank to be £2.50 - £4.50. However, instead of charging your business this amount the banks charge much more, typically around £30!

If it was known how much it actually cost the bank when you breached your contract, then you would only be able to claim back the difference between this cost and the amount you were actually charged. This doesn't happen though, as if the banks admitted the actual amount it costs them, then they are also admitting to charging unlawful fees, leaving them open to everybody who has ever been charged claiming their bank charges back. As a result, because no one knows the actual cost to the bank, you can claim the whole amount back! This is actually in the banks best interest, as they would rather refund the hundreds of thousands of people who claim, than refund everybody! (Because many people won't bother to claim, as they think its too complicated, don't have the time, or simply don't know that they are entitled to claim their charges back).

How to Claim your Business Bank Charges Back

In many respects, the technique of claiming your business bank charges back is similar to that for personal claims. First, you write to the bank asking for a refund of your charges, and stating why you think the charges are unlawful, including a list of all the charges that you can claim back.

Unfortunately, unlike with personal accounts, you cannot get copies of your bank statements under the Data Protection Act, so you will need to of kept copies of all your statements for the last 6 years (or the period you are claiming for if your business is less than 6 years old). You should of kept these statements in your records anyway, so this shouldn't be a problem.

Once you have sent your letter of complaint to the bank, you have two choices, you can either complain to the Financial Ombudsman which is free, but you can't claim interest on the charges, or filing a claim in court which costs a small amount but you include this as part of your claim, and you can also claim statutory interest at the rate of 8%. If you've been charged a large amount, this interest can add a lot to the actual amount being claimed!

In almost all cases, the banks will settle with you before the financial ombudsman makes a binding decision, or before your case comes to court.

Professional Help to claim back your Business Bank Charges

As with most business operations, it's usually a good idea to get professional help. Not only does it ensure that everything is handled correctly, it also saves you a lot of time.

Our partner, Claims Financial offer a professional and regulated service to claim your business bank charges back on your behalf. They require no upfront payment, and their fee is simply 25% + VAT of the amount that they reclaim for you. As well as gaining a settlement with the bank, they will also chase up your payment, making the whole process easy so that it does not disrupt your business in any way.

In order for Claims Financial to take on your claim, you must fulfill the following two conditions:

• You have all your business bank statements for the last 6 years (or the period you are claiming for if your business is less than 6 years old).
• Your business turnover is less than £1 million.

As long as you can fulfill these two conditions, Claims Financial can help you!

All that you need to do is to fill in the simple Application Form, and Claims Financial will contact you to discuss your claim. This can be the first step to claiming back thousands!

Claims Financial is regulated by the Department of Constitutional Affairs in respect of regulated claims management activities; its registration is recorded on the website www.claimsregulation.gov.uk