Claim back bank charges

Most of us have been hit by a bank charge at least once in our lives and, most of the time, we just suck it up and move on. But sometimes those charges can escalate and, before you know it, you could be caught in a stressful cycle of constantly owing money. If you genuinely think what you’ve been charged is unfair, here’s what you can do to claim back bank charges.

Most of us have been hit by a bank charge at least once in our lives and, most of the time, we just suck it up and move on. But sometimes those charges can escalate and, before you know it, you could be caught in a stressful cycle of constantly owing money. If you genuinely think what you’ve been charged is unfair, here’s what you can do to claim back bank charges.

Rob Silvey
Finances expert
8
minute read
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Posted 26 FEBRUARY 2020 Last Updated 18 MARCH 2022

Can I reclaim bank charges? 

There’s no set list of things you can dispute and those you can’t. It comes down to whether you genuinely think you’ve been unfairly charged. The emphasis is definitely on ‘genuine’ - you can’t complain if you’ve made a mistake. 

Banks charge for all sorts of services, such as using your cards abroad, for a packaged bank account or being overdrawn. But the charges that tend to sneak up on you are the ones that you might feel are unfair. If you want to make a complaint and reclaim unfair bank charges, then you should put together your case and present it to your bank first, through their official complaints process.

How to find out if you are eligible to claim 

If you fit into one of the following scenarios, it could be worth your while to claim. Bear in mind that you’ll need to show evidence for anything you say (if you lost your job, which made things difficult financially, for example): 

  • Are you in financial hardship? This applies if you’re struggling to pay for life’s essentials – your rent, mortgage, food, utility bills and council tax. It also includes problems covering debt repayments, such as loans or credit cards. 

You might have recently lost your job, had to take a pay cut or your partner’s become ill and now there’s only one wage coming in. Financial hardship can creep up on us at any time, so don’t be afraid to ask for help if it happens to you. 

  • Are the charges disproportionate? If the charge is significantly greater than the amount you were penalised over, you may be able to appeal for the charge to be refunded or reduced to an amount that’s more in line with the cause of the charge.
  • The charges are reinforcing a vicious cycle. This can happen if you’re continually being pushed into your overdraft and debt because of the charges. This usually goes alongside being in financial hardship.

How much can you reclaim? 

The next thing to do is to work out how much you’re owed. You should do this by gathering information on all the fees and charges applied to your account. You may need to ask your bank for this information – but make it clear that you only want a list of charges and not a list of transactions, otherwise they’ll just send you a bank statement (that you might have to pay for).

Top tip

There’s no point in complaining to your bank unless you fully understand why you were charged in the first place. When you open a current account, it’s vital to read the small print carefully. Not much fun, we know, but it should give a clear explanation of what charges may apply. For example, you may be charged for going overdrawn for a short period of time.

How to claim back bank charges 

Once you have the information you need, it’s time to take action: 

  • Make a case directly to your bank. Set out what your complaint is and why you think it’s unfair. If you’re claiming financial hardship, tell your story honestly and, if you have evidence, then all the better. Try to talk to someone in person – picking up the phone or visiting your local branch can often be more productive than simply relying on the bank’s automated systems and processes.
  • Follow up any correspondence to make sure it’s been received. Your bank has eight weeks to resolve your complaint or tell you why they haven’t been able to do so. They should also keep you informed of their progress during their investigation.
  • Your bank will come back to you with a solution. The best-case scenario is that they refund you all the charges. Alternatively, they may come up with a compromise, such as a partial refund or write off the debt you owe (taking you back to zero). They might ask you for more evidence and ask you to fill in some forms. This is usually if you’re in financial hardship, because they’ll need to clearly understand your income and expenses.
  • If you’re not happy with the response, then take your case to the Financial Ombudsman and they’ll help you for free.
  • Take your case to court. If the Ombudsman doesn’t support your case, you can take it to court. This is likely to be expensive and risky, so think very carefully before going down this route.

What should I do if I don’t have old statements? 

If your bank isn’t being helpful, you have a legal right for information related to your charges in the form of a Subject Access Request. While you won’t normally be charged for this, under certain circumstances there may be a ‘reasonable fee’ for administration costs.

How far back can I claim bank charges? 

The general rule for claiming back bank charges is six years. That’s because if you end up going to court to reclaim bank charges, the Statute of Limitations Act states that you can only claim within six years of the charge. In Scotland, this is limited to five years. 

However, the Ombudsman Service is likely to suggest you claim as far back as you can. They’ll then decide whether the whole claim is worth pursuing. You’ll need documented proof for all your claims and mitigating circumstances that support your claim.

Can I claim back bank overdraft charges? 

If you think your overdraft charges are unfair, you may be able to get a refund. For example, if you were £10 overdrawn, a fine of £50 may seem excessive. This situation doesn’t automatically give you a reason to make a complaint, though – it depends on the circumstances. 

If you’re a good customer with a previously unblemished record of money management, then it would be reasonable for you to feel harshly treated. But if you have a history of slipping into your overdraft and generally not being great with your cash, then your bank may feel as though the penalty is warranted.

What is the Financial Ombudsman Service?

The Financial Ombudsman Service (FOS) is a public service, designed to resolve complaints between financial businesses and customers. They’ll look into your case for free, but you won’t be able to go straight to the Ombudsman; you need to first approach your bank to give them a chance to resolve your issue. 

If your bank fails to come back to you with a final decision on your complaint within eight weeks, doesn’t give you the answer you’re hoping for or you think the answer isn’t fair, then you can take your case to the Financial Ombudsman Service.

Did you know?

In 2020/2021 current accounts were the most complained about product in the Financial Ombudsman’s banking and credit sector, with more than 23,600 new complaints brought over the financial year. 

How to complain to the Ombudsman 

Getting advice from the Financial Ombudsman Service is pretty simple. You can contact them over the phone on 0800 023 4567 or by using one of their online complaint forms.

Simply fill out the form, explaining your situation in as much detail as possible. You’ll need to tell them how the charges have impacted you in your current financial situation and why you feel the charges are unfair. It’s important to be as accurate as possible, providing all of the relevant information.

The Ombudsman Service will then review your case and if you prove to be eligible, they’ll represent you. It’s important to know that this process can take months. 

If the Ombudsman doesn’t support your complaint, then you can take it to the courts. This should be a last resort as, once you’ve been to court, you won’t be able to go back to the Ombudsman.

Finding a current account 

Of course, the best way to avoid charges in the first place is to find a current account that meets your needs. You might even be able to find one that offers an interest-free overdraft. Just make sure you read the fine print and understand all the terms, conditions and charges before you sign up.

Frequently asked questions

Should I use a claims management company?

It’s probably best to avoid using a claims management company to reclaim your bank charges. Most online sites charge you for the service and there’s a risk they’ll give you the wrong information. 

The Financial Ombudsman offers free advice on how to complain to your bank and what to do if you need to take it further.

Can reclaiming bank charges affect my credit score?

Complaining to your bank won’t affect your credit score, but the overdraft you’re being charged for may well do. While an arranged overdraft is unlikely to hurt your credit rating, going over your agreed limit or failing to pay off your overdraft will have a negative impact. Late or missed payments will stay on your credit file for six years and this could make it difficult to borrow money in the future.

It’s also worth knowing that your bank may not take kindly to your challenge, and they could place restrictions on your account or even close it altogether. If you’re determined to pursue your claim, it might be worth opening an alternative account with another bank as back-up.

Can I claim back bank charges on packaged accounts?

If you hold a packaged account, you’ll likely be charged a monthly fee in exchange for a number of benefits, such as travel insurance and preferential rates. If you were mis-sold any of these benefits, you may be eligible to make a claim – but you’ll need to prove that you weren’t correctly informed about the charges for or the costs associated with the benefits. 

If you feel that you were mis-sold any of the benefits of a packaged bank account, it’s worth considering making a claim.

Can I claim back bank charges on a business account?

Business bank accounts typically come with a range of additional charges, some of which might not be immediately obvious. Even supposedly ‘free’ business accounts can have fees buried in the small print. That’s why it’s vital to read and understand the terms and conditions before opening a bank account for your business. 

When it comes to paying HMRC, the good news is you can claim back bank charges as an allowable business expense – just make sure the bank account is in your business name, not your own.

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