Many of us have experienced a time when we’ve accidentally slipped over our overdraft limit and been slapped with a hefty bank charge as a consequence. For some, this can be a one-time, at-the-end-of-the-month thing and all is well once payday arrives.
However, there are many people who have or are experiencing a vicious cycle of charge upon charge. This can either take them into more debt or is keeping them in financial hardship.
How can somebody get out of debt if unnecessary debt keeps being piled on top by their bank?!
Luckily, the excessive bank charges no longer exist. The days of being charged around £35 for going over your overdraft, having a cheque bounce or having a payment returned are gone. These occurrences now have a nominal fee which is more in line with the actual costs of these unfortunate actions (no more than £5).
But what about the charges we’ve been hit with in the past? Some people may still be in financial hardship as the charges kept propelling them further into debt.
It’s important to note now that any reclaiming you wish to pursue must be supported by evidence that you either were in financial hardship when the charges were applied or that having the charges applied sent you into financial hardship.
If you fit into one of the following categories, then you are eligible :
It is important to remember that all banks are subject to the Standard Banking Regulations and the Lending Code, which states that all customers must be treated fairly and actions must be considered if a customer is in financial difficulty.
But what is considered financial hardship? You will need to be experiencing, or experienced in the past more than one (perhaps several) of the following to be considered in financial hardship:
Remember, you will need to provide evidence and an explanation of any of the above situations and how this has affected you.
If you have had charges applied that are significantly greater than the amount you either went over your overdraft limit or had a payment bounce then you may be eligible. For example, if you went over your agreed overdraft limit by £5, but then were charged £35 for doing so, this seems a rather steep consequence, 7 times the offending £5!
Again, remember if you had the above occurrences happen, but it wasn’t due to financial hardship, you are very unlikely to be considered for a refund of these charges. Therefore, it’s important you keep track of money coming out of your bank account, especially when you’re getting low on funds. Companies are often sympathetic if you get ahead of the game and notify them beforehand. Often, companies can freeze costs for a period of time, or arrange a payment plan which can prevent the situation from escalating and affecting your credit rating.
Before being able to clear the debt caused by a bank charge, you may be charged again. As a result, the debt snowballs into bigger more unmanageable debt, adding to financial hardship.
So, if you have a history of charges from your bank, which have added to or caused financial hardship (even if you have since managed to get out of the financial trouble), then read on in this guide as to what steps to follow and what to expect along the way.
The bank is not going to want to give you back your money. They will not want to accept responsibility for your financial hardship and if they do offer any refund, they will be very unlikely to add any interest for time you haven’t had said money in your account.
But don’t be disheartened by this. All this means is that you need to keep confident that you are owed this money, that they have caused or added to your financial hardship and that you are not going to let it go!
The process of reclaiming your charges from the bank is to write to them to ask for them back. But in order to do this you will need to know how much money you have lost through these charges.
If you have online banking you may be able to see as far back as you need. If not, write to your bank, firsty to request a list of any charges applied to your account over the past six years (this is the acceptable amount of time as per the Statute of Limitations Act allows from the time of an offence), but you can request all charges ever applied.
Don’t ask for statements as these can be charged for and you could end up paying a significant amount (£100s) to receive 6 years worth. A bank may refuse to send you this information, but you can request this legally under the Data Protection Act. They may charge you a small fee for this information.
Once in receipt of your list of charges, it’s now time to write to your bank (this includes banks that you no longer bank with if they have applied charges), and ask for them to return the charges to you, explaining and presenting evidence as stated above as to how this added to or caused financial hardship and the consequences you experienced due to this – remember this is about being treated fairly and be considerate if a customer is in financial difficulty.
This is the time where some people may be offered a full refund or a partial refund.
There may be stipulations to how the refund is applied. For example, they may ask for further information (or box ticking) by asking you to complete a financial statement form or they may say no to a refund but offer help in other ways such as suspending future charges. Bear in mind, that for many people this is where the rejection will come in.
If the bank refuses to consider your claim and does not provide a justified reason, it’s time to ask for help.
You can make a claim against your bank (or previous bank), and receive help and support by talking to us here at Resolver. We’ve helped millions of consumers make complaints against providers and helped both to reach suitable and positive outcomes.
We will help you to construct communication with your bank, the ombudsman and in situations where further action needs to be taken, such as going to court, we have the tools to help you every step of the way. Get in touch with Resolver today and see how we can help you reclaim bank charges you are eligible to have back.