Once upon a time, Banks' and Credit Card charges were subject to comparatively little
regulation. They did not have to justify the level of their penalties or when they
chose to levy them. They were permitted to raise charges upon charges (so if a penalty
made you overdrawn, you could be penalised again for the overdraft).
Not any more.
Whilst banks are not required to disclose the costs they incur as a result of your
unauthorised overdraft or unpaid cheque, direct debit or standing order, contract
law usually demands that their penalty charges reasonably reflect those costs. Research
suggests that the real cost can be £4.50 or less – so charging an average
of £30 a time could well be unjustifiable in the majority of cases.
The Office of Fair Trading has already forced banks to reduce their penalty charges
for credit cards to a maximum of £12, and is currently conducting an investigation
into banks' current account costs. Banking Refunds have been successfully reclaiming
the whole amount of the charges. In the meantime, banks are understandably increasingly
reluctant to allow cases to go to court.
If you believe your bank's overcharged you, it's time to talk to one of our expert
Advisers. Then we'll do everything we can to get back 100% of your money plus statutory
interest in the shortest possible time.
Case studies worth studying.
The best way to explain what's likely to happen is to give you a couple of examples.
Mr H's bank took £64 in penalty charges from his account. On appealing to
the bank, they defended their position but agreed to refund half as a gesture of
goodwill. Mr H was still not satisfied, and threatened court action covering all
overcharges for the previous six years. Soon after he filed his claim, his bank
refunded him £840.
Chrissie's benefits office failed to pay her for a couple of weeks. Her bank overcharged
her for exceeding her overdraft limit and refused some of her direct debits. The
charges significantly derailed her budgeting and led to more charges – eventually
her debt spiralled to £3600. Finally she was faced with the stark choice of
considering bankruptcy – or taking on her bank for the return of all those unfair
charges.