The Independent - Don't let the banks frighten you off

Britain's banks are a force to be reckoned with, but for months now, the headlines have been about "David and Goliath" stories of customers seeking to claim back "unfair" penalty fees from these giants. The campaign has gained pace, and thousands of people are now trying to reclaim thousands of pounds in charges.

But campaigners were dealt a blow last week after news emerged that Lloyds TSB had won its second battle in the courts against a customer. Builder Julian Rudd took his case to Lancaster County Court last month, claiming £3,000 in relation to unauthorised charges and interest. But the judge dismissed his legal challenge on the grounds that Rudd had failed to state an adequate claim.

The ruling, on 11 May, came days before a similar challenge by Kevin Berwick, another Lloyds current-account customer, was lost in court. His claim for £2,545 in fees and interest, brought before Birmingham County Court, was dismissed on the grounds that charges levied were a legitimate fee to service the account.

Berwick had argued that the charges – as high as £30 – for going over an agreed overdraft limit were unreasonable, and that he should be reimbursed for deductions from his account. But the district judge in the case said Berwick had failed to satisfy the court that he had any ground in law to recover the charges.

The fact that a second case has come to light is a bitter blow to the thousands of people still hoping to reclaim these charges from their bank, encouraged by an ongoing Office of Fair Trading investigation.

Until these cases emerged, consumers had been confident that claiming back their bank charges would be easy. But consumer groups are urging consumers not to be disheartened by the news.

Martin Lewis of MoneySavingExpert.com points out that the vast majority of people do get a payout without going to court, but he adds that the message to take is the importance of filing your claim correctly. "What we're starting to see is a minuscule number of cases in which claimants will have to go to court. If this is the case, it is worth doing your preparation. If you don't turn up, you cannot expect to win."

Further, as the consumer group Which? explains, both cases to date have been County Court rulings, which do not set a precedent that other courts have to follow.

In a statement, Lloyds said it was "not appropriate to comment on the details of a specific case," but said it would always submit a robust, written defence to the courts. "Our customers are at the heart of our business and we never want to see them in court, which is why we may also offer to settle matters out of court as we are entitled to do."

As a consumer, you should take solace in the fact that the banks are still paying out many tens of thousands a day; for now at least, it seems, the weight of the huge numbers of successful reclaims easily outweighs these two results.

And consumers may be spurred on by the launch of a £100,000 "fighting fund" to help bank customers in their legal battles. This has been pledged by campaign groups including MoneySavingExpert.com and the Consumer Action Group, as well as private individuals, to ensure that people are not deterred from reclaiming fees. The fund will be activated if a suitable opportunity for a precedent-setting bank-charges claim arises.

In the meantime, the message remains simple: customers must go on fighting to reclaim excessive bank charges, especially when figures from the price comparison service uSwitch.com suggest that £2.12bn is waiting to be claimed.

And the signs are encouraging: MoneySavingExpert.com says that more than three million template letters have been downloaded from its website. It echoes the opinion of all the consumer groups in urging people to act now to reclaim charges.

Further, if you do experience any problems – such as your bank refusing to refund any of your charges, or making you an offer you are not happy with – it's worth remembering you can take your case to the Financial Ombudsman Service.

Whatever you do, don't let the banks scare you off – the consumer revolution must go on.

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