|
|||
| The independent answer to your debt problems | login join | ||
Banks have enjoyed a major income source with unfair bank charges until recently, but in April 2008, a High Court Judge confirmed that the charges contravene fairness rules defined by the Office of Fair Trading and the financial sector now awaits the court's decision.
To date, banks have made billions of pounds from penalty charges raised for unauthorised overdrafts, cheques or direct debits that cannot be honoured and notification letters, for example, at an average charge of £30 each. This is seem by many as an unfair charge on those who are already struggling managing their debts .
Customers who experience a slight cash flow difficulty might incur a £20 charge for every refused payment, resulting in a worse cash flow situation, and they are usually met with little sympathy or assistance when they contact their banks. It's this response from the bank staff that has caused many customers to start fighting back.
For the moment, the Financial Services Authority (FSA) have granted banks permission to put complaints concerning bank charges reclaims on hold whilst the High Court case is decided. The legal rulings have become pretty confusing and complex, but customers who feel they have been unfairly charged are still making claims, especially since the FSA has agreed that the six year back-claim rule will not take into account this waiting period. Most banks now offer a specialist department to deal with bank charges claims on a case-by-case basis.
When a customer opens a bank account they are entering into a contract. Banks can charge for an unauthorised overdraft or for bounced cheques as these actions are viewed as a breach of contract (known as liquidated damages) and these charges can be enforced by law - if they are reasonable. The amount charged must reflect the actual costs the bank has incurred (their damages) or it becomes a penalty which is unenforceable by the courts. This argument is covered in the Unfair Terms in Consumer Contracts Regulations 1999, Unfair Contract Terms Act 1977 and at Common Law.
A customer should be able to claim back any excessive charge that the law would class as a penalty. Old statements will reveal all the charges and customers may write to their bank requesting a comprehensive list of all charges showing what the offence was, the date and the amount, under the Data Protection Act, especially useful for on-line bankers who do not receive a hard copy of their statements by post. By law the bank must provide this information in 40 working days. Many templates for an ideal letter are available on the internet.
There will often be a delaying tactic employed by the banks - a form to complete. The Data Protection Act 1998 makes provisions that a customer is entitled to a list of any charges over the past six years from their bank at a maximum cost of £10. This, however, does not include statements, which enables banks to charge higher fees. Some banks are taking advantage of this loophole by informing customers that a list of charges is unavailable, but old statements are. Customers who have made clear that they are making the request for a list of charges under the Data Protection Act seem to have less trouble. There are also several companies offering reclaim services if you would rather have your claim handled by a third party.
