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More time for bank charges

Are you one of the millions of people across Britain who have been subjected to bank charges for unauthorised overdrafts, bounced cheques or failed direct debits, and have yet to join the ranks fighting back against bank charges? The good news is you still have time!

That’s because the Office of Fair Trading (OFT) has announced that the results of its investigation into bank charges will not be released this month as expected. Instead, the OFT will announce at the end of April what their scope is for wider investigation, and will make their findings available at the end of the year. The reason for the delay is because the OFT has said it must consider what effect capping or reviewing bank charges will have on those who do not incur them – which could spell the end of free banking as we know it.

But follow our handy guide showing you can claim some or all of your charges back, and you may soon find a nice fat cheque landing on your doormat.

• Under English and Welsh Law you can claim up to six years of charges back, under Scottish it’s five.
• Find out how much you have been charged over this period – you may have to write to your bank, as they are not allowed to keep this information from you under the Data Protection Act.
• Once you have a figure, set up a parachute bank account with another provider, just in case yours is closed.
• Write a letter to your bank stating that under the Unfair Terms In Consumer Contracts Regulations (1999) all penalty charges must reflect administration costs. Because banks cannot make a profit from you being overdrawn, they have therefore acted illegally. State how much you have been charged and that you want it back.
• This will likely result in a refusal letter, so say you will pursue it through small claims court action. You may then be offered some or all of your money back.
• If the bank again refuses, and if your claim is under £5,000 you will need to fill in a form on http://www.moneyclaim.gov.uk/
• If your bank does not respond within 14 days, you win by default. If it acknowledges your claim, they will have a further 14 days. However, because no bank has appeared in court to defend their charges, you’ll most likely be successful.

The recent victory by a businessman who managed to claw back £36,000 from NatWest is thought to be the biggest win yet, and further evidence that banks will settle claims rather than fighting the principle of charges in court. Be warned however, if you are successful your bank may penalise you by closing your account with them, so think about opening a parachute account first and then decide what you will do with your money. Why not open an ISA or a savings account and start making your unexpected windfall work hard for you.