A guide to reclaim bank charges
A guide to reclaim bank charges
Most of us have been hit by a bank charge 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’re stuck in a rut, or you genuinely think what you’ve been charged is unfair, then here’s what you can do to claim back bank charges.
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 should definitely be on ‘genuine’. You can’t complain if you’ve made a mistake.
Banks charge us for all sorts of services, such as using our 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 decide 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 (such as if you lost your job, which made things difficult financially):
- Are you in financial hardship? This applies if you’re struggling with all of 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 perhaps your partner’s become ill, and now there’s only one wage coming in. Financial hardship can creep up on us at any time, whether it’s dealing with a disability, illness or being forced to permanently live on credit – if this is the case, don’t be afraid to ask for help.
- Are the charges disproportionate? If your charge is significantly greater than the amount you were penalised over, you may feel as though you are being treated too severely. In this case, you may be able to appeal for the charge to be refunded, or reduced to an amount which is relevant to the cause of the charge.
- Charges are reinforcing a vicious cycle – this can happen if you’re continually being slapped down back into your overdraft and into debt because of charges. These sorts of cycles usually go alongside being in financial hardship.
How much can you reclaim?
If you think right is on your side and you want to do something about it, then 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 just want a list of charges and not a list of transactions, otherwise they’ll just send you a bank statement (which you might have to pay for).
What should I do if I don’t have old statements?
If your bank isn’t being helpful, you do 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, there may be a “reasonable fee”, relating to administration costs, under certain circumstances. The next steps are:
- 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.
- Follow it up to make sure your correspondence has been received. Your bank has eight weeks to resolve your complaint, or tell you why they have not 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 will 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 (you have been warned).
How far back can I claim bank charges?
The general rule for claiming a bank charges refund is six years. This is because, if you end up going to court to reclaim bank charges, the Statute of Limitations Act states that you can only claim for something within six years of the charge you’re claiming for. In Scotland, this is limited to five years.
However, the Ombudsman Service will likely suggest for you to claim as far back as you can. They will then decide whether the whole claim is worth pursuing. Usually, the Ombudsman works to a rule of three years, but, while you may get refused, there’s no harm in trying. You will need documented proof for all your claims and mitigating circumstances which support your claim.
Can I claim back bank overdraft charges?
If you feel that your overdraft charges are unfair, you may be able to get a refund. For example, if you were £10 overdrawn, a fine for £50 may feel significantly disproportionate to the small amount you were overdrawn. This situation doesn’t automatically give you a reason to make a complaint – it really depends on the circumstances. So, 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’ve got a history of slipping into your overdraft and generally being all over the place with your cash, then your bank may feel as though the penalty is warranted.
Claiming 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. These can be things such as travel insurance, as well as preferential rates. Whatever the benefit, if you were mis-sold any of these benefits, you may be eligible to make a claim.
However, it’s not a simple as claiming that you didn’t want these features or benefits to your account, you need to prove that you weren’t correctly informed about the charges, or the costs associated with them. These benefits may have changed over time, which may have prompted an unexpected cost.
If you feel as though you have been affected by this, it’s worth considering making a claim. Finding out more through the Financial Ombudsman Service is one of the best places to start.
What is the Ombudsman?
The Ombudsman 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 have approached your bank first to give them a chance to resolve your issue.
If the bank fails to come back to you with a final decision on your complaint within eight weeks, or give you the answer you’re hoping for (or you think it’s not fair), then you can take your case to the Financial Ombudsman Service.
How to complain to the Ombudsman
Seeking the advice of the Ombudsman Service is relatively simple. You can contact them over the phone, or visit their website to find a complaint form.
Simply fill out the form, informing them of your situation with 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 personally feel that the charges to your account are unfair. It’s important to be as accurate as possible, providing all of the relevant information.
The Ombudsman will then review your case and represent your claim, if you prove to be suitably eligible. It’s important to know that this process can take months.
Of course, 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, which may include an interest free overdraft. Make sure you understand all the terms, conditions and charges - that does mean reading the small print. So start searching current accounts at Compare the Market.