Bank Charges are one of the major sources of income for banks. All banks impose charges on certain failed transactions e.g. a bounced cheque, exceeding overdraft limits, returned direct debits etc. Indeed, banks are allowed to impose charges that reflect the amount of work undertaken by administrative staff in certain situations such as customers going into the red or handling a cheque which cannot be cleared due to insufficient funds in the account. If a cheque or direct debit has to be returned, the bank can charge for the cost of this process. However, any such charge must be reasonable. Banks who regularly impose hefty charges between 25.00-35.00 on a customer who is 1.00 overdrawn cannot be said to be acting fairly. The Office of Fair Trading (OFT) declared that these charges were unfair and unreasonable. It is a scandal and many have called it daylight robbery. Banks when asked to produce documents justifying the charges have failed to do so. However, it is likely that the banks will have gathered some ammunition to produce at the High Court in the test case on bank charges in January 2008. The test case relates only to current accounts and not business accounts. The brutal truth is that unfair bank penalty charges have been imposed on millions of people. It has been a merciless punishment on people who may have simply overlooked their current account status or had a late payment of wages. Excessive charging has resulted in many people getting into debt which also has drastic consequences in credit ratings. The High Court will no doubt be asked to consider whether the charges are fair. The penalties which can be imposed, and which no doubt may be in the individual contract between customer and bank, relate to a range of services following troublesome banking. However, the OFT's investigation confirmed that banks were imposing illegal and unfair charges. It is widely thought that the High Court will rule in favour of the customer. Recent research has suggested that about 41 per cent of people do not know the interest rates applicable to an unauthorised overdraft. Many more have simply swallowed the hefty charges imposed on them without even a letter of complaint or fight. It is also worth noting that 19 per cent of people are always overdrawn. These surveys also show that overdraft charges of 4.7 billion were paid by 43 per cent of current account holders last year. Credit Card / Store Card Charges With the increasing popularity of advantages associated with credit cards and store cards, almost all banks and big store chains have come out with their own cards for people to shop, withdraw cash and purchase online. The British enjoy paying by plastic and the trend to purchase on credit will continue for quite some time. However, there is a price to pay for such short term financial cushion. Credit card companies and banks charge grossly handsome penalties when customers fail to make their minimum repayments by the due date. Many card providers charge annual fees in the subsequent years although there may have been a waiver of such a fee in the previous year. High interest rates are also imposed when someone goes beyond the allowed limit. The Office of Fair Trading found that the charges imposed on credit charges were also unfair and unreasonable. It was a long battle but the victory was an important one for the consumer. Credit card charges can be reclaimed and it is worth remembering that the High Court test case will only focus on bank current accounts and does not affect credit card or loan charges. How to Claim them back There is no doubt that these charges result in many people heading into more debt and finding themselves in a helpless position. Single parents, pensioners, students and hardworking people in general suffer greatly. The charges can add up very quickly over the years and can amount to thousands of pounds. If you feel that you have been unfairly charged by your bank then you can claim yourself or seek some professional help. When trying to get the right amount of compensation it is always worth seeking guidance and allowing skilled representatives to handle the entire claims process. Dealing with bank letters and fighting for the correct compensation takes up time and effort. Such energies are often spent on earning a living and looking after the family. People will often be told that a simple letter of complaint to a bank will get you the desired result. It is not always so straightforward. Some banks are familiar with standard complaint letters and will often reject complaints. Compliance officers are employed by banks to defend claims. Often, if the banks do decide to compensate, there may a payment as a 'gesture of goodwill'. Accepting such offers is simply giving the bank the upper hand. Customers deserve to have all of their charges refunded with the proper interest. The Financial Ombudsman Service (FOS) which deals with rejected claims does not help on how to present a claim. How a case is put is very much down to the individual. The FOS will simply assess a claim on the arguments it is presented with. In such cases, it is always worth getting professional help when fighting large financial giants for compensation. Claiming against your bank will not result in your account being closed. Under section 14 of The Banking Code, the Standards Board advised banks to ensure that they do not make a disproportionate response to customers claiming back these 'default' fees and treat the customers sympathetically and positively.' Furthermore, any threat to close an account would be contrary to the Financial Services Authority's (FSA) principles on treating customers fairly (TCF). Specialist organisations fearlessly fight on the behalf of the consumer to claim back excessive penalty charges. Complaint letters will be carefully drafted and may include legal precedents which help in the battle to get the right amount of money. The workload involved in tackling bank and credit card companies is substantial. Dealing with phone calls, rejection letters, drafting statements of claim, taking rejected claims to the FOS and calculating correct compensation is a meticulous process. Specialist compensation firms also have useful contacts such as Solicitors and Barristers who can assist and advise on any complex areas. Such specialist firms also can help with all other types of unreasonable charges. As well as helping reclaim bank account charges for both current and business accounts for the last 6 years, there can also be claims for reclaiming credit card charges, mortgage exit fees, mortgage arrear fees, Payment Protection Insurance (PPI) and other penalty charges. Most compensation specialists are registered with the Information Commissioner which means that they abide by Date Protection rules. This provides a safe secure environment for your confidential information and one can rest assured that information will not be passed to third parties without consent. The majority of firms handling such claims for compensation operate on a no win no fee basis. If successful, the firms charge a percentage of the compensation won and this will or will not include VAT. These firms will only charge you for their services once they have successfully claimed back from the bank on your behalf. In the event that the firm fails to get back anything from the bank (though chances are very low) you will not be charged a single penny. There is nothing to lose and plenty to gain.
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