Bank charges?

Question

How come everyone seems to be claiming back bank charges? How does this work and why are they entitled to it?

Answer 1

When you go overdrawn, or over your overdraft limit, the banks charge you a penalty charge of around £30.

However, the banks are only allowed to charge what the breach costs them, and aren't allowed to profit from these penalty charges. As there is no way it costs them £30 if you go over your limit (its estimated to be between £2 - £4.50), then they are making a profit, so the charges are unfair.

If the banks disclosed how much it cost them, say £2, then you would only be able to claim back the difference between what you were charged and £2.

However, the banks won't admit how much it actually costs them, because if they did, it proves they are making a profit. So, because no one know the actual cost to the bank, you can claim the whole charge back.

For more information on claiming, have a look at my website below which has detailed step by step guides to claiming your bank charges back for the last 6 years, as well as the latest bank charge news and developments. There is also template letters and spreadsheets, and forums for one to one help and support during your claim.

The site is free to use!

Answer 2

Someone will no doubt point you at the "moneysavingsexpert" site so I will address the other points ..

It works because under the banking laws the Banks are not permitted to prifit from administration charges -

So when you challenge the "unfair" charges by putting in a claim, they would rather pay one person back ALL their charges than allow it to go Court and have a legal decision on what level of charges is "fair".

Of course sooner or later a legal decision WILL be made - and then they will have to lower their charges ...

Answer 3

Banks can not legaly penalise you, they can only make back a loss.
If the charge is more than the asociated loss the charge is "unfair" and under the unfair terms in consumer contracts act an unfair term has no affect on the contract e.g. no charge is payable - not even a reduced amount in order to cover the actual loss.
If you go to court you can claim 8% interest on the charged amount.