Bank Charges
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Bank Charges, Overdraft fees, Unpaid standing order or direct debit penalties

Banks can't charge penalties - they can only reclaim losses

Charging a penalty is illegal - banks (as with almost all other legal contracts) can only charge a fee equivalent to the cost incurred by them.

In a recent investigation, the BBC found that the cost, to a bank, of an individual going overdrawn was around £4.50.

Fighting excessive bank charges

In June 2005, Law student Stephen Horne took Abbey National to court for what he deemed excessive and unfair charges on his current account and won.

Stephen was charged £32 by the Abbey each time his direct debit bounced.

He couldn't see how the bank could justify £64 to reject two direct debits in one month and felt this must be disproportionate to the costs incurred by the banks. He therefore took Abbey to Plymouth County Court. 

Abbey failed to submit a defense form. This left the judge with no option but to issue a court order by default saying that "the defendant must pay the claimant an amount which the court will decide and costs". 

Are bank fees excessive?

Banks are among the biggest profit organisations in the country. The banking code has no rules about how much a bank can charge - only that these charges are transparent.

If you have recieved a charge for going overdrawn in excess of £5, or a charge from you bank that you do not believe reflects their costs then you can claim it back.

You can claim back all of these costs from the past 6 years, wether you have records of them or not. The process is very straight forward and will probably only cost you the equivelent of a couple of stamps. Find out how, here