Unfair bank charges - reclaim

Thousands of people pay unfair bank or credit card penalty charges every year and just accept it. But now, the customers are fighting back and a number of websites have sprung up to help people reclaim unfair charges from their bank free of charge. One of these is www.penaltycharges.co.uk, set up by Stephen Hone and his friends after he succesfully reclaimed significant charges over several years from his bank. His website claims to have helped people recover a total of over £1 million.

The penaltycharges.co.uk/forum subsequently closed down following a solicitors email suggesting that the forum contained unlawful advice. However this does not effect the validity of the argument that banks have unfairly charged their customers

Whilst the banks claim that the charges are within the terms and conditions that you have signed up to, the view is that these have to be "reasonable" charges. Under the Unfair Terms in Consumer Contracts Regulations (1999) all penalty charges have to truly reflect the cost of administering them. A team of experts set up by the BBC recommend that a reasonable charge for a returned cheque would be £4.50, when many banks charge £30! The OFT have ruled that a reasonable rate would be £12 and so many banks and building societies have amended their fees to reflect this...

 

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Although some of the banks have now come into line, there is nothing to stop consumers from claiming back excessive fees that have been levied in the past. Many banks are offering refunds minus the £12. However, where customers have refused that offer, many banks are offering full refunds rather than have the expense of going to court. There are a number of websites offering free advice as well as some companies that will make your claim for you. Its not just banks that are affected by this. You can also apply for refunds of unfair charges from building societies and credit card companies. In all cases you can claim back as far as 6 years.

In July 2007, the Office of Fair Trading issued legal proceedings in the High court with the aim of getting clarification of the law. The OFT believes that the banks are not interpreting the law correctly. A decision is not expected for some months.