Alex Harries's diary

In the latest of the virtually unbroken series of embarrassing defeats for banks being pursued through the courts by customers sick of being hit with penalty charges - decreed as "unlawful" by OFCOM - Natwest bank has repaid £35,988 to an anonymous customer whose small business was hit with the charges.

• Find out more at BBC News

In a related development, a number of people, including the administrator of the Consumer Action Group forums - one of the most powerful community groups challenging the UK banks now - have suggested that the 6 year limit should no longer apply. This limit - the maximum period of time bank charges could be reclaimed within - apparently no longer applies, according to several people far cleverer than I am, who know how to quote facts and figures and other things.

• You can find out more, here

... Not that I consider some areas of the retail banking industry to be one of the most greedy*, incompetent and ignorant groups of numpties to ever grace this country - oh no.

Ok, I do.

Fancy some more proof? Try this ("Are Penalty Charges Bank Robbery?"), and this (video - "The Money Progamme investigates bank charges") from the BBC.

Grumpy luv /al

* Well, how else do you justify £190 in charges in a month where I'm paid £280, for two bounced payments of £15 and £50?! 

(Off-topic. Again. Wonder when I'll ever do some work...? ;o) ) 

I mentioned earlier that I was planning to chase my old bank to recover several years' worth of bank charges since an Office of Fair Trading report concluded that all charges over £12 were illegal.

The BBC News website has now run a story covering the growing movement of people who are taking their banks to court to reclaim their bank charges and, much more interestingly, they have also proved a "how-to" guide (including template letters) to reclaiming bank charges.

In a nutshell, the process goes something like this:

• You send a Data Protection Access letter to your bank by recorded, demanding all your bank statements for the last 6 years. You enclose a £10 fee, and the bank has 40 days from the date your letter is signed for.
• After you receive your statements (which usually takes 41-ish days, according to most of the reports from successful claimants), you calculate all the charges your bank has applied - bounced payment charges, unauthorised overdraft charges, etc - and list each one in a spreadsheet.
• Print this list of charges (your "Schedule of Charges"), and sent it - along with a "Letter Before Action" - to the bank, which warns them that you are demanding all your charges back, and will issue a Small Claims Court action in 14 days if they don't comply.
• The bank will normally reply with a partial settlement offer - this is usually only a fraction of your amount (an example recently was a settlement offer of £45 for a claim of £3,300. They won the full amount back without having to go to court). You can either accept the partial settlement - which usually includes an (illegal) clause which tries to stop you later claiming more charges back - or you can send them a reply which politely tells them you'll be continuing with your court action.
• You will probably also have to issue proceedings in the small claims court, which costs up to £120 (you can claim this back) before the bank pays up.
• Eventually - usually after a period of around 2 1/2 months - your bank should pay out. Go celebrate!

Most advice websites - including discussion forums where more experienced members assist people to make their claims - recommend accepting offers above 90%.

More and more banks are now delaying until the court papers have been issued before paying up but, to date, I haven't heard of a bank going to court because, as the BBC News article mentions, the banks know that they cannot substantiate charging £45 just because someone's gone 50p over their overdraft limits.

It's important to stress that, although there is a huge amount of help for every step of the way, and everyone from laywers to numpties like me can do it without a solicitor's help, the process does involve the threat of court action and there is a remote chance you'll end up having to fight your claim in court. Don't panic, but do remember it.

If you want more help, you could do worse than to sign up on this community forum (consumeractiongroup.co.uk/forums) - as there are thousands of people on there who have either claimed successfully, or are going through their claims now.

If you do decide to go after your bank, good luck :o) /al

Useful weblinks:

• BBC News article on bank charges
• BBC News guide to reclaiming bank charges
• Consumer Action Group discussion forums - include...
  
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(Off topic fun. Isn't it always these days?)

I've just been reminded by a friend that you can apply to reclaim any bank charges you've had in the last 6 years. For example, a direct debit for £15 was bounced recently because I had only £14.12 in my account (yup, I was 88p short). For that I was charged £27 for bouncing the charge, £30 for an unauthorised overdraft (caused by the £27 charge), and then charged a further £30 the next day for not repaying my unauthorised overdraft.

To recap: that's £87 of charges for being 88p short. To add insult to injury, the reason I didn't have enough in the bank in the first place was my bank's shiny new online banking website which displayed my bank balance, recent charges, a block of text and a nice, shiny, flashing advert all on top of each other. (If that's the level of ability of their webteam, maybe I should apply to them for a McJobbidge? ;o).

A lot of information and advice is available online - a quick Google search turned up www.consumeractiongroup.co.uk near the top of the results, and there's a lot of information on there to get started on reclaiming your charges. ThisIsMoney also has a good feature on it.

In short, what you normally do is:

• Send a form letter to your bank requesting your bank statements and details of any charges applied (you can get up to 6 years' worth in England and Wales, or 5 years' in Scotland). Normally they have 40 days to reply.
  
  
• Once you receive the statements, total up your charges and send a second form letter - with the total amount of these charges plus any other bits and bobs (the information is provided online) - and send it back. This shouldn't take more than 14 days I think?
  
  
• In an ideal world, you should then get either a settlement offer back from the bank, confirmation of a refund for all your charges, or confirmation that they're going to investigate your complaint. It's important that you read all the information you can get your hands on throughout this procedure to make sure you're doing everything the right way!

Think I'll be starting to do some maths tomorrow. A bit of mental artithmetic comes up to a figure of £bloody hell for me... ;o)

Couple of points:

• The whole process can be completed within 80 days, depending on your bank's level of cooperation.
• This might also be suitable for credit cards, or if it's not, being able to claim credit card charges back is something that's definitely in the pipeline.
  
• You can get (usually free) independent advice from the Citizen's Advice Bureau, or (normally) paid advice from a solicitor, financial adviser, or another suitable professional - this is never a bad idea so you can make sure everything you're doing is correct and above board.

Disclaimer: I'm not a financial adviser. Hell, you shouldn't even be listening to me, so it's up to you to figure out if the information contained in here is useful to you and accurate. Please don't sue me if it all goes horribly wrong - although it shouldn't - 'cos I can't afford it!