Bank charges: are you eligible for a refund?

By Kara Gammell Published: 2:07PM GMT 03 March 2010

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Many people"s hopes of reclaiming bank charges were dashed by the new Supreme Court ruling, but last week it emerged that majority might still be means to share in reclaims value a sum of �480m if they can show they suffered monetary hardship.

With stagnation at the top levels given 1997 and home repossessions attack a 14-year high, some-more people than ever are eligible. While this is not a loophole for reclaiming funds, you might additionally be means to record a chronological claim, even if your resources have softened recently.

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If you can infer genuine monetary hardship, this does not affect the legality of the charges. But it is applicable to how your bank or construction multitude treats the volume you owe.

Under both customary promissory note regulations and the Lending Code an agreement to that all vital banks have sealed up banks contingency provide you sincerely and be demure if you are in monetary difficulty.

The Financial Ombudsman Service (FOS), the eccentric have use of for settling disputes in between businesses on condition that monetary services and their customers, has seen a fivefold enlarge in these sorts of claims, but the great headlines is that some-more than 50pc of the hard times cases are winning.

According to total from the Office of Fair Trading (OFT), those in hard times have been charged about �1.6bn over the past 6 years.

This includes fees for bouncing a cheque, or when a remuneration is bounced, additionally well known as an delinquent object fee, or when such a assign is paid but it takes you over your overdraft limit, or prosaic fees charged each day you have the unapproved overdraft. With majority banks charging �35 for each fee, even a teenager malfeasance can infer costly.

But what is deliberate monetary hard times and how do you go about proof it?

A orator at the FOS said: "Genuine monetary hard times is where the consumer"s income is deficient to cover in accord with vital losses and encounter monetary commitments."

But this difficulty of people is wider than majority think, and majority people might be astounded to find out they are eligible, for example, if you are incompetent to encounter simple necessities such as profitable your rent or mortgage, legislature tax, food or application bills. You might additionally validate if you humour from a estimable dump in income. This can be since of losing your job, starting full-time education, due to a incapacity or critical illness, going on parental leave or even receiving a lower-paid position.

You might additionally be authorised if you often go over your overdraft extent and are vital off credit cards to have ends meet. In alternative words, if the charges have contributed to creation your monetary hard times incident materially worse, you might be eligible.

The FOS additionally looks at cases where the comment hilt has unintentionally slipped over the extent by a couple of pounds and the assign is a lot higher than the offence. For example, if you went �1 over your overdraft but are charged �35.

However, the FOS stresses that these cases are not regularly candid and those who ceaselessly trip over their limit, but are not in hardship, are not on trial to be successful. But if you think you might be eligible, afterwards a explain might be worthwhile. Remember, you are still authorised to go to justice to aspire to your explain serve if you lose at the Ombudsman, nonetheless you cannot go to the Ombudsman once you lose in court.

So how do you go about creation a claim?

Start by creation a list of the charges your bank has done over the past 6 years or five years if you are in Scotland, owing to opposite laws. You can usually explain bank charges behind this far.

If you do not have annals of all the charges from your bank statements you can ask them from your bank, that is legally thankful to give the sum to you underneath the Data Protection Act. They are legally authorised to assign �10 for this information, but check by phoning them first, since a little banks will only send it to you anyway.

The subsequent step is to write to your bank, explaining that you fit the monetary hard times criteria and would similar to your box looked at. You can additionally ask for seductiveness to be combined to your claim.

To work out your devalue interest, have use of the online electronic caclulator at online-calculators.co.uk/interest/compoundinterest.php.

In the minute you need to give them the compulsory report about your monetary resources to capacitate them to cruise your incident fully.

Your bank will probably send you a monetary have a difference to complete, that you should fill in as shortly as possible. If your bank or construction multitude agrees that you are experiencing monetary hardship, they should indicate an suitable settlement. This might or might not engage shortening the volume you owe depending on the circumstances.

However, be patient, it can take weeks or months for a bank or construction multitude to have a decision.

If you are unfortunate with what your bank offers, or your ask to be deliberate is abandoned and you hold you encounter the criteria, you can write to the FOS, who will take the have a difference up for you (0845 080 1800; financial-ombudsman.org.uk).

You cannot simply go approach to the Ombudsman, though, you contingency regularly protest without delay to the bank first. Keep in mind that you need to wait for eight weeks from the date you sent your primary minute to the bank perfectionist income prior to you write to the FOS.

However, if you have perceived a rejecting or last response, you can go sooner. The FOS will examination each box individually, to see if any one-off resources apply.

When essay to the FOS, keep in mind that it is not meddlesome in template-style letters. It wants to listen to the outcome of bank charges on you from a human perspective, so have it as personal and specific as you can.

If all else fails, you can aspire to the explain serve by receiving your bank or construction multitude to court. However, that can be really dear and will need a lot of research, and you might be compulsory to show up in justice to urge your case. For some-more report on how to record a authorised claim, hit Citizen"s Advice on 0844 848 9600 or revisit their website, citizensadvice.org.uk.