About Reclaiming Unfair Bank Charges

It has been calculated that banks have paid out in excess of £1bn to customers reclaiming unfair bank charges. The fight has been compared to the revolution against poll tax charges but this one has been fought by customers in their own homes.

According to the Banking Code Standards Board complaints have escalated against banks accused of ripping off customers by imposing high charges for relatively minor account problems.
Millions of people across Britain have been the victims of unfair bank charges but now customers are fighting back. Some customers have incurred charges of upto £40 for bounced cheques, unauthorised overdrafts or failed direct debits.

Banks are responsible for creating more difficulties for their customers by charging £20 or more for sending a letter and larger amounts for missing direct debits and overdrafts. A High Court test case by the Office of Fair Trading has meant that the complaint has been put on hold for now but a High Court Judge confirmed that ‘fairness counts’.
The Unfair Terms in Consumer Contracts Regulations 1999 say penalty charges must only cover the administration costs, banks cannot make a profit from charging a customer for going overdrawn.  Banks will be acting illegally if they charge more. Although the eight big banks argue that their charges are not excessive independent studies have shown that the true cost of administering the ‘mistakes’ is in the region of £2.

However, the judge sided with the banks on the fact that banks clearly state the terms of the bank account in plain English, and they are still fighting to get exemption from the ‘unfairness’ rule.  If the banks were to win their case customers will continue to be charged excessive amounts however, if they lose we may all find that banks start to charge for all banking services.