How to Reclaim Your Penalty Bank Charges in the UK

Bank account penalty charges can be incurred through unauthorised overdrafts and unpaid items such as cheques, direct debits or standing orders. Although banks maintain that the very large fees levied on customers accounts for the services involved with these transactions are legitimate, many people have had their charges refunded, although it may take the threat of court action to persuade your bank to do this.

Instructions

Difficulty: Moderately Challenging

1. Unearth all of your bank statements for the past 6 years and check to see if you have been charged penalty charges. Charges levied more than 6 years ago cannot be claimed for (see below). If you do not have some statements, write a letter to the customer service department of your bank clearly stating that you would like copies of all your financial transactions for the past 6 years.
2. Your bank may try to charge you for this information. If they do, make it clear that you are aware of the Freedom of Information Act. This states that you have a right to access your financial information and should not be charged to pursue this right.
3. Add up all of your charges. Write a letter to your bank demanding that they repay what you believe are unfair penalty charges levied over the past 6 years. Request that they repay the total sum of your charges within 28 days and threaten to pursue this request in court if they do not agree to do so.
4. Post this letter by recorded delivery to endure your bank receive it. Address the letter to the customer services department of your bank.
5. Your bank will usually respond to the letter by either refusing to meet your claim or by offering to settle in part, or in full.
6. If you bank refuse to meet your request or only offer a percentage of your total charges it’s time to take court action. Visit an online court service such as www.moneyclaim.gov.uk. Enter all your details and the amount you are claiming for. You will be charged for this service but can eventually claim this charge back from your bank.
7. Your bank is now obliged to defend its case before the judge or else to pay the amount you are claiming against it. If it chooses not to defend itself, as well as paying the full amount of your claim, it will also refund your court fee. No bank has ever defended its penalty charges in court.
8. Be prepared to wait for months before receiving your bank charge refund. Banks are notorious for dragging their feet and often do not refund consumers until a few days before official court dates.

Tips & Warnings

• You can claim the last 6 years of charges, or 5 if you live in Scotland. (For claiming back your fees in Scotland, see the special entry below.)
• Charges older than 6 years cannot be claimed. Legally these charges are too old to be considered in court.
• Some lenders have threatened to close the accounts of people after they have claimed back their charges. This is very rare. If you are worried, open an account with another bank, just in case your original account is closed.