Can I Reclaim My Bank Charges?
The Quick Answer
If you have received a charge from your bank for going over your authorised overdraft limit, for a direct debit not clearing as a result of insufficient funds or for not paying your credit card on time, then yes you can make a claim. You can legally make a claim for charges going back six years, the maximum allowed by law. To get started on your claim, read the guide to reclaiming unfair bank charges. To find out more about the charges and claims, read on!
The Long Answer
The UK has a collective overdraft of over £10bn. More and more people are using their overdraft as a necessity in managing their finances rather than a short term borrowing facility and banks are cashing in to the tune of £3bn a year from these overdraft fees alone.
Should someone go over their agreed overdraft limit, they are usually given a charge of over £30, sometimes as much as £120! These charges soon snowball as direct debits begin to be declined and cheques bounce. Add to this the incredibly high interest rates banks apply, and you are soon talking a lot of money, which is all profit for the banks.
These charges are of concern to the Office of Fair Trading, who said in April 2006 that banks were only justified in charging the administration costs of dealing with the excess, which makes banks current charging schemes excessive.
It is on these grounds that anyone can make a claim against their bank to reclaim these charges. There is a chance a claim could reach the small claims court but the banks really don't want it going that far and will often pay out after receiving your first letter!