Bank charges

Prior to November 2009, bank charges could be easily reclaimed. Reclaiming unfair bank charges was as simple as sending a letter to your bank stating that you intended to take them to court or to the ombudsman.

What are unfair bank charges?

Unfair bank charges are charges received from your bank for going over your overdraft limit, sending cheques that bounce and for failed direct debits. They are usually for around £35.00.
In response to letters customers would usually receive a cheque for six years worth of unfair charges plus interest. However this all changed in November 2009 when the Office of Fair Trading challenged the banks at the Supreme Court. In November 2009, a Supreme Court case looked at whether bank charges were legally unfair which unfortunately was decided in favour of the banks with the charges being deemed fair.
The OFT decided it wasn't going to fight the case so now bank charges are more difficult to reclaim. However that is not to say they cannot be reclaimed, they can but just only in specific situations. If you have a one off bank charge, this is different, the chances are if you contact your bank they will drop it in goodwill. If you have a number of charges over a longer period, they can be reclaimed but only if you are struggling with your finances.

Can I reclaim bank charges?

To reclaim unfair bank charges, the Financial Ombudsman Service (FOS) has set out specific criteria. If you meet the criteria set by the Financial Ombudsman Service, you may be able to reclaim unfair bank charges on a current account.
Although a ruling by the Supreme Court meant the Office of Fair Trading (OFT) lost its legal battle with high street banks over the right to reclaim unfair bank charges on an overdraft facility, there are still unfair charges you can reclaim.
To claim back unfair charges on an overdraft you will have to go through the usual complaints procedure with your bank or building society. Once you have gone through the complaints procedure and it has been exhausted, you will receive a letter of deadlock. The letter of deadlock will state you don't have a claim and so your bank or building society will not refund you. Once you have this letter you are then free to contact the Financial Ombudsman Service (FOS)
The FOS has specifically said it will only look at complaints about bank charges in 3 different scenarios:
−    If you are in financial hardship. If you can prove you are struggling to meet your priority debts such as rent, mortgage, utility bills, council tax etc. and you are now living off credit, you may qualify as being in financial hardship
−    If the charges your disproportionate. For example, if you have gone into your unauthorised overdraft by £3.00 and get charged £35.00 for doing so, the charges are disproportionate. The FOS may look at this, however if you do this regularly you are less likely to succeed
−    You have charges upon chargesIf you find you are having charges upon charges and you are never clearing your overdraft before new charges are added on, the FOS should look at this