Bank Charge Reclaim

The theory behind bank charge reclaiming is simple: charges should be proportionate to costs. If you go over your overdraft limit, write a cheque with insufficient funds in your account or a direct debit is refused, you are going to be charged by your bank for 'administering' the situation. The trouble starts because these 'fees' are very high in comparison to the actual administration cost.

For example, charging you £30 to send you a letter letting you know you are £5 over your overdraft limit can be argued as disproportionate. No one is suggesting that there shouldn't be bank charges just that they should be reasonable and not seen as a fine or penalty imposed on the customer. An independent report suggested that the actual administrative cost of sending the letter etc., would be no more than £5.

The banks generate between £1 and £3 BILLION a year in profit from these charges so they are reluctant to reduce the charges which is why there is a test case going on currently to decide things once and for all.

The FSA (Financial Services Authority) have put a stop on all charge reclaims until this case has been concluded but that shouldn't stop you from staking your claim now. In fact it is more important to register a claim ahead of the stop being lifted for a number of reasons; you need to be in the queue for your money, you want to be able to claim back as far as possible (up to 6 yrs), and you don't want to miss the boat if things change quicker than expected.

Are you eligible? >>