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Bank Charges Court Guide New legal arguments to take on the banks

This guide is archived. The information in it is out of date – please do your own research before acting on any of the information here. We’ve no plans to update this guide, we’ve left it here for reference only.

Bank Charges reclaiming isn’t over! Some can still get charges back, joining the £1bn already repaid. After the 2009 Supreme Court technical ruling reclaiming is primarily for those in financial hardship, so first read the main Bank Charges guide. Yet this guide explains the legal arguments for the riskier route of going to court.

Bank Charges

While every effort’s been made to ensure this article’s accuracy, it doesn’t constitute legal advice tailored to your circumstances. If you act on it, you accept that you do so at your own risk. We can’t assume responsibility and don’t accept liability for any damage or loss which may arise as a result of your reliance upon it.

Your claim is on hold in court

If you’re one of the thousands of people who started a claim in the county courts, probably during the start of 2007 before the OFT’s test case began, it’s likely your case was stayed or suspended (sisted in Scotland) while the test case was progressing.

In November 2009, after the OFT beat the banks in the High Court and Court of Appeal, a shock technical ruling from the Supreme Court overturned this and kiboshed the OFT's hopes in the test case; soon after the OFT decided it wouldn’t continue, even based on new arguments.

Sadly, this means things are now trickier. To carry on you will almost certainly need to use a different piece of law to the one you already tried and went to court with. These complications are one of the reasons we tended to favour the Ombudsman over the courts in the immediate time prior to the test case.

Now the test case is over you can either wait until the court contacts you, if it hasn’t already, or jump start the process yourself. Before deciding what to do we’ve an alternative suggestion for you to check:

Step1: Can you use the Ombudsman route?

The fact you went to court, doesn’t stop you changing ship at this point and jumping to the Ombudsman. The Ombudsman is free, risk-free and doesn’t rely on legal argument. Best of all, we have already had reports of successes since the Supreme Court case – though success is far from guaranteed for everyone.

What type of cases will the Ombudsman look at?

It’s specifically said it will only look at bank charges cases in three different scenarios:

  • You’re in hardship

    If you’re struggling to meet basic necessities such as mortgage or utility bills, you’re constantly living off credit, making credit card cash withdrawals or have huge charges, you’re likely to meet the criteria.

  • Your charges are disproportionate

    Say you dipped into your unauthorised overdraft by £2.50 and incurred a £35 charge, it’s utterly disproportionate. The Ombudsman may look at this, though if you regularly do so, you’re unlikely to succeed.

  • Snowballed charges

    This is the nasty situation of ‘charges on charges’ which traps people so they can’t clear their overdraft before new charges are added on. It’s one of the reasons many people can reclaim £1,000s. Though, of course, if this happened you’re likely to be in hardship too.

If one or more of these look likely to apply please read the full Who can go to the Ombudsman? section to look at the specifics and see how strong you believe your case is.

If you’re unsure as to whether you meet these criteria, read on. If you’re certain they don’t apply, move onto Step 2: Try to fight for a settlement.

Who can switch from court to the Ombudsman?

This is relatively untested territory, though the Ombudsman has confirmed it may be able to help those whose court case is suspended or discontinued.

What’s crucial to understand before you start is...

The Ombudsman will not look at claims that have already been considered by a court

Yet that means if your complaint is currently suspended, you discontinue or there have been substantial changes in your circumstance since a decision in court you may be able to go there. Here are some important points...

  • If your complaint is currently suspended

    Many claims will be on hold for several months so there may be opportunity for the Ombudsman to investigate before you need to update the court about your intentions.

    Keep your court claim open and you can go back if the Ombudsman doesn’t decide in your favour, but as soon as there’s been a decision from the court the Ombudsman won’t be able to help.

    In the event you get a payout from the Ombudsman you will need to discontinue the court claim as you can only have one successful claim.

  • If your court deadline is soon – you could discontinue the court process

    If the timings are tight you may need to discontinue from the court process entirely as the Ombudsman doesn’t look at complaints which have already been considered by a court – this will mean you lose any fee you’ve already paid the court.

    If the Ombudsman doesn’t decide in your favour you could still try the court route again later (you’d need to start from the beginning), if things had changed by arguing it’s a new claim on new grounds. Yet if you go back to court it will mean having to pay more fees.

  • The Ombudsman’s easier, but it doesn’t guarantee success

    The Ombudsman’s strength is that it’s simple, risk free, doesn’t require argument, but that doesn’t mean you will win. Though winning in court is looking like it may be an even tougher fight.

  • Ask it for guidance on whether you can shift your claim

    If you’re not sure whether you fit the Ombudsman’s criteria then give it a call for guidance on whether it will allow you to shift your case to see what it suggests on 020 7964 0500.

  • It won’t consider legal complaints

    If you do go to the Ombudsman it has said it’s unlikely to consider ‘templated legal arguments’, it will only look at cases based on whether you’ve been harshly or unfairly treated and are in hardship, so you won’t be able to rely on any legal argument in your claim.

  • Hardship can be in the past

    It can apply to either your situation now, or at some point in the past. If you’re no longer in hardship the Ombudsman will look at how your bank treated you at the time, but it will help your case if you contacted your bank for help when you had the difficulties.

    You may also be able to go back longer than the six years a court would allow, as the Ombudsman suggests claiming as far back as you like (although technically it can only help with claims within three years of when you realised there was a problem, so if you were stayed in July 2007, act now) and it will decide whether or not all or part of your claim can be considered.

If it’s touch and go, then it’s probably worth reading the other steps in this guide before deciding on a course of action. If you’re going with this route, jump to the how do I discontinue my claim? section below, and to read more about the Ombudsman process, see the main Bank Charges guide.

Step 2: Try to fight for a settlement

UPDATE: This guide hasn't been updated since 2010. Very few have tried this system and we've not had any successes.

Reclaiming bank charges is an art not a science – in many ways it’s about negotiation. It's designed to try and get back the money we believe has been unfairly taken off you as quickly and as swiftly as possible.

Fighting in court is going to be tough, and for most people, it should be avoided – even if just because amending your claim to the new legal arguments is likely to involve a fee. So at this point we need remember…

You want your money back, the bank doesn’t want to give it you. Yet it’s obliged to treat customers fairly and stay within the law.

If the bank believes your complaint may be investigated by the Ombudsman or that you are resolutely going to stick at court action, take up the new arguments and make it send costly barristers – it may offer a full, or more likely part, settlement – as that could be cheaper than incurring the expensive of fighting.

Go with gusto

So if you’ve time, acting confidently and continuing to press your case could be crucial – though of course nothing is tried or tested yet.

If you’ve already heard from the court with a date or suggestion to lift the suspension on your case, you’re unlikely to have time to carry out this step so go to Step 3: Should you continue? instead.

Write to your bank explaining your complaint, firmly stating you intend to take the matter back court if it refuses to hear your case or if it rejects it – citing the new legal arguments explained below. As part of this you could ask if it’s willing to allow you to amend your claim (it’s cheaper if you get permission from your bank) as that is a strong indication you’re serious.

If possible do also include the human cost of the charges, tell your story of why they’ve been debilitating, and if they’ve caused you financial hardship specifically mention it as that’s what the Ombudsman has said it’ll look at, so the bank needs to be sensitive of the personal impact too.

Template letters

Free sample letters to adapt and send

Feel free to write the letter to your bank yourself, though below, to help, we have provided a number of sample letters for different circumstances that can be used as a base.

Adapt all letters to your circumstances, and delete the guidance notes. If you’re unsure ask a friend to read and check if it makes sense

Pick which letter is most appropriate to your circumstances. If you find the letters confusing then seek any available legal help or speak to advisers at the Citizens Advice Bureau for help.

If you’re including the hardship argument it’s important to explain why it’s been such an issue. Tell them about your circumstances naturally (and truthfully), and add any evidence of hardship to speed the process up. This could include bank/credit card statements, a redundancy letter, a P45, confirmation of a special payment plan, a letter from a debt advisory service or anything else. As a short made up example...

“I lost my job as an electrician in July 2005, and as my wife was ill in hospital at the time things were very tough. Soon we were unable to pay the bills and moved into our overdraft and beyond it. We then started to be hit by charges of £35 a time, which were completely unaffordable and we were trapped unable to...”


What happens next?

This is completely untried at the moment, so we have no clue about the bank's attitude to this attempt, though, as always, most people should expect rejection. After all, even when banks were paying back millions to reclaimers, most people were met with a rejection letter first time.

You should get a letter back from the bank acknowledging your complaint and there are a number of possible outcomes:

  • You’re offered a full or partial refund. Chances... very unlikely

    You may be offered a full or partial refund as a ‘goodwill gesture’. If you don’t think it’s enough, call up and ask for what you feel is appropriate – remember this is a negotiation.

    A quick call saying, “I’ve had £1,300 of charges, you’re offering me £400 – I’ll take £800” has worked in the past. Remember banks have to balance the administration cost of continuing versus clearing this off their books. And you need to factor in your hassle and risk of continuing against getting some cash now.

    Please report your success in the reclaims success reports thread if you get a refund.

  • It offers a refund but says it should pay off your debt. Chances... unlikely

    You may be offered a refund but told it must be used to pay off the debts you currently have at the bank (whether overdrafts or cards). The Ombudsman has said this is generally acceptable as it is returning you to the position you would be in without charges (and is still a win after all).

    However if by the bank doing this you are still left in hardship, eg, you have mortgage or utility arrears, tell it. If it doesn't budge read Step 3 below.

  • It’ll ask you to fill in a financial statement form. Chances... moderate

    If you’ve told the bank you’re experiencing financial difficulties and it’s unsure you fulfil the hardship criteria, or even just to deliberately delay, it may send you a financial statement form, or something similar, to complete.

    Fill this in and send back as soon as possible. Do re-include your original letter, adding a line that you’ve enclosed the info as requested – this emphasises that you’re serious and confirms exactly what you’re asking for.

    Once you’ve sent that you could then get the same list of results as above.

  • It offers to help but not to refund any charges Chances... moderate

    Even if the bank has accepted your word that you’re in financial difficulties or does after you’ve sent in the financial statement form, this doesn’t mean it has to give you your money back, just that it has to treat you sympathetically.

    It could try and help in other ways, such as not imposing any further charges, stopping any debt enforcement action against you or putting you into a payment plan to manage any debts you have with it. If you’re not happy with the offer carry on to Step 3 below.

  • The bank rejects your claim. Chances... likely

    By auto-rejecting even people with good claims, the banks succeed in stopping many people either going on to the Ombudsman or taking their claim to court as people give up, and that’s the whole point.

    If your first letter doesn’t work, and you’ve enough time, before going further you may want to give the bank a call, or write another letter saying you’re going to continue your court claim or and you think your case is strong, but would prefer to sort it out quickly. See how that works and carry on if it doesn’t.

    Ultimately if it doesn’t budge you’ll need to decide whether to continue your claim in court. Carry on reading to see what this means.

Step 3: Should you continue the claim?

UPDATE: This guide hasn't been updated since 2010. Very few have tried this system and we've not had any successes.

If you can’t go to the Ombudsman, the bank won’t bargain or there isn’t time before the suspension is lifted, then it’s crunch time and you need to decide whether you’re going to continue. It’s important to understand taking a claim to court is no longer an easy win, the result is uncertain and...

There may be additional costs and you may need go to court and argue complex and untested legal issues

As this guide is new much is still uncertain. If you don't need to act now, it may be best to wait until we get feedback on the new arguments before you do. For more info on these please read the full new legal arguments section below so you understand exactly what you will be taking to court. Please comment & ask questions in the court claims forum feedback.

To help you make the decision whether to amend your claim and continue, here’s a quick Q&A:


The New Legal Arguments

UPDATE: This guide hasn't been updated since 2010. Very few have tried this system and we've not had any successes.

We believe the £35 a pop type of charges for going beyond your authorised overdraft limit, or bouncing cheques or direct debits, are unfair. They’re designed to entrap people, so they get charges on charges, and the banks make over a billion quid a year from them.

And this isn’t just our view, before the test case, the OFT had provisionally said it thought they were unfair too...

The problem's finding a fairness law, so something can be done about it

The OFT tried by taking on the banks in a test case, and indeed it beat them in the High Court, then again in the Court of Appeal.

Yet in November 2009, the Supreme Court ruled in a shock judgment, that followed strong arguments from the banks expensive barristers, that due to a narrow technical decision bank charges didn’t NEED to be fair – well at least on the main piece of law that was tried.

What was the law examined in the test case?

The test case focused on the Unfair Terms in Consumer Contracts Regulations, yet in the end it all boiled down to one simple nerdy technical point – were bank charges a core part of a bank account?

Unlike the lower courts, the Supreme Court ruled that they were, and that meant under those specific regulations the price of bank charges could not be used to examine whether they were fair.

Had this not been the case then the level of charges would’ve needed to be proportionate to banks’ costs, and a £35 charge to send a simple letter isn’t proportionate. Yet the Supreme Court ruling blew this out of the water.

The basis for court claims

After the Supreme Court decision, we hired a top banking QC (see MSE hires top QC archive news story) to suggest possible new grounds for reclaiming to us.

They were just thought papers, and at this stage are untried (although in Feb 2010 a judge in Scotland allowed the amended arguments to be submitted) therefore there is no way to know whether they will be successful or not – the law is a fickle beast. However we have adapted the arguments and other sources and used them to draft up our sample Particulars of Claim (the part of a claim that mentions the legal argument being used).

There are two arguments that can be used and combined, the first uses a different part of the same regulation that the OFT’s test case was argued under, the second is newer, and possibly provides a greater chance of success.

HardshipUnfair Terms In Consumer Contracts Regulations 1999

In the Supreme Court ruling on the bank charges test case, the chief judge of the Supreme Court thought it important enough to say this ruling didn't stop people challenging fairness under 'Regulation 5' of the Unfair Terms in Consumer Contracts Regulations (which the Supreme Court case did not cover).

Here's what Regulation 5 actually says:

5. – (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

The test case ruled out the fact that the price of bank charges could be used to assess fairness under this regulation. In other words the old argument that ‘charges are levied at £35 but it only costs the banks £2' has gone.

Yet it may be possible to use other ideas to examine fairness, though chances of success on this argument may be weak (more on that in a moment):

  • Customers can't opt out

    Bank accounts cannot be 'individually negotiated', you get what you're given. This also applies far more specifically to bank charges – there is no ability to opt out of having charges, eg, to have an account where there is no function to go beyond your overdraft limit. This is a significant imbalance between the parties.

  • Unfair cross subsidy

    While it's accepted some cross subsidy is acceptable within business, here, the minority of customers are paying an excessive proportion of costs for the structure of banking. This creates a significant imbalance between the parties.

  • Effect on vulnerable consumers

    It is arguable that banking is a public service or at least has a public service element, more people have bank accounts than telephones – and we are strongly encouraged by the government to use banking services. The workings of the original UTCCR directive mention this pubic service remit.

    Yet this is a pubic service where there is a cross subsidy that has to be met by the most vulnerable, least affluent members of society.

  • Charges snare and are designed to multiply

    The structure of £35 transaction bank charges are such that they effectively generate more charges – thereby trapping people in a charges spiral. In other words, you go beyond your limit, get a charge or charges, and then due to being unable to afford that charge, incur more.

    Many people who've had small numbers of charges initially have seen them multiply into thousands and been unable to do anything to stop that process continuing.

  • Lack of competition

    Until very recently (see Bank Charges Comparison), since the advent of the bank charges test case, no bank marketed its accounts based on the charges a customer could be expected to pay. There has never been any competition on this – there is no choice for consumers to go elsewhere for a different level of charges.

  • Incomprehensible nature

    Consumers are not told clearly what the cost of their bank account will be in different situations and the interaction of those charges.

    Understanding when and how much you will be charged is not transparent, and while the terms and conditions lay it out, the practical impact of this is not explained – some banks often have difficulty interpreting these rules themselves.

    The name 'unauthorised' overdraft is a fallacy. Banks do permit people to take money beyond their overdraft limit (and it’s extremely profitable to them) and in fact have a second hidden ‘unpaid' limit beyond which they won't allow customers to take more money – though they still levy more charges.

    Yet customers are not told when this will occur, or at what level their transactions will no longer be paid. Nor are they told the amount they can spend, nor given the ability to opt out of transactions once they know it will occur a charge – the information is only ever retrospective.

  • Money Management

    The entire structure of charging people repeatedly when they have little money, runs counter to the ability to fairly manage a bank account. One true example of this unfairness is a woman who thought she had £50 left of her overdraft – yet unbeknown to her, and not indicated by the bank, that day a cheque from two months earlier had just been cashed putting her over the limit.

    From memory, she then spent £40 in six different transactions (including a sub-£2 bag of carrots) and incurred a £35 charge for each, a total of £210. Yet had she been told of the situation, she could've funded the account, or even chosen just to take out £40 in cash – leaving only one £35 charge.

The chances of success?

While these arguments certainly make sense, when the OFT looked at them, it didn’t believe they had a realistic chance of success, (see the OFT to drop bank charges MSE News Story or read the full OFT Personal Accounts decision – focus on pages 13 and 14).

However while that certainly is dissuasive, it isn’t definitive. After all in the original test case the OFT thought it would win, and already did at the High Court and Court of Appeal. The law is like quicksand and sadly can be inconsistent.

The Consumer Credit Act 1974

This is a piece of law that wasn't looked at in the test case, and it’s likely to be easier to argue (though still far from a guaranteed success).

Hardship

Here’s what section 140a of the Consumer Credit Act (CCA) actually says:

S.140a The court may make an order … in connection with a credit agreement if it determines that the relationship between the creditor and the debtor … is unfair to the debtor...

Therefore it's open to a plain argument that the relationship between customers and lenders is unfair. Yet the big bonus of using this law is where the burden of proof lies – it's for the banks to prove charges are fair rather than customers to prove they're not.

We presented this argument to the OFT but it said it didn’t feel it could take this on, as the law is about an individual’s relationship with the bank – so there was a greater chance of success if individuals did it themselves.

The arguments as to why bank charges are unfair under the CCA are as follows:

  • Customers can't opt out

    All the same arguments as explained in detail in the UTCCR section above apply here including; customers can’t opt out; it’s an unfair cross subsidy; the effect of charges on vulnerable customers; the fact charges are designed to snare, the lack of competition; the incomprehensible nature of charges; and the difficulties they create for money management.

  • Fairness can ALSO be about price

    The big advantage of looking at fairness under the CCA is it can also look at whether the price of a charge is fair. The original test case fell simply because the Supreme Court ruled that price couldn’t be looked at under the UTCCR regulations – yet that doesn’t apply here.

    Therefore you can argue that the cost of charges are disproportionate to the service provided in other words the “they charge £35 for a letter, but it only costs them £2” argument.

  • The banks must prove they're fair

    The best of all this is the burden of proof is on the banks to prove that the relationship is fair and not the consumers to prove the charges were unfair.

  • Provisions for redress

    The CCA also includes detail on what a consumer can be awarded if the charges are found to be unfair, which can include full or partial amounts – so the refund would depend heavily on a consumer’s particular circumstances.

    This means it's potentially a much more valuable route for those trapped in a charges spiral and have suffered other loses as a result, eg defaults on their account, bankruptcy and repossession caused heavily by charges. Though of course that means the Ombudsman route applies too.

This doesn't apply to everyone

The date range that can be used for this is not as wide as the previous law. This piece of law applies to all new charges from 6 April 2007, and to people who had charges before April 2007 providing the borrowing was still outstanding on 6 April 2008. It also may not apply to accounts closed before April 2007.

There are still many questions on how this law applies, in particular to accounts that moved in and out of an overdraft limit over this time, but as it’s yet to be tested it’s too early to say what the result on this will be. As it’s the bank that needs to challenge the legality of the charges though, it's not an automatic disqualification.

The chances of success?

This is completely untried and tested on bank charges. On paper it looks pretty good, yet establishing and arguing it will be difficult. So chances of success are impossible to work out.


Starting a new court claim

UPDATE: This guide hasn't been updated since 2010. Very few have tried this system and we've not had any successes.

If you don’t meet the criteria to go to the Ombudsman (see the main Bank Charges guide) the only other option is to take your bank to court. This shouldn’t be undertaken lightly; it will take work, research, involve fees and you may need to turn up in court to argue it.

Yet that will only happen if you actually get to court…

Reclaiming bank charges is a process of negotiation, telling the bank you are planning court action doesn’t require you to follow through with it.

By showing your intent to take this seriously you may find there is a chance the bank will make a settlement to save it the time and expense of the process. Until you actually get to court there is little harm in doing this.

So always complain to the bank first, court action is a last resort, for full info on doing that and how much to claim for, an interest calculator, and sample letters to send to the bank see the main Bank Charges guide.

From this point on we will assume you have read that guide and had your letters to the bank rejected.

How to make a claim

This article is based on the process for England and Wales. We’ve included the basics for other jurisdictions but for more see Northern Ireland Courts & Scottish Sheriff Small Claims.

To make a claim in court you need to submit a complaint saying you believe a party has infringed your rights, explaining the law that applies and giving details and evidence.

The easiest way to make a court claim is to simply use one of the online systems:

  • In England and Wales. Use the Moneyclaim website. There's a starting fee of between £25 and £100, depending on the size of your claim, which can be paid by a credit or debit card; though this is refunded if you win.

    If you don't have plastic to pay on, get the paperwork (form N1) to start the claim from your local county court and pay there; it's the same price. The fees may be waived if you're on benefits (see the EX160 ‘Do you have to pay fees’ leaflet on the HMCS website).

  • In Scotland. You can’t start an online claim in Scotland so you’ll need to go to your local court.

  • In Northern Ireland. Use the Northern Ireland Courts online service.

Understanding the small claims rules

Many people talk of going to the small claims court – yet it doesn’t actually exist – it’s actually a system within the civil claims procedure that many sub £5,000 claims are allocated to.

Within the small claims system…

  • You don’t have other the party’s costs awarded against you. If you lose a small claim it’s rare to have to pay the other sides costs although a judge could decide you need to pay for a limited amount of their expenses.

  • You can claim back up to 6 years. This is all about the statute of limitations, the rule is six years in England, Wales and Northern Ireland and five years in Scotland. So claim back all bank charges within that period.

  • Try to keep claims under £5,000. If not you’ve less chance of being in small claims, which is by far the preference. Keep claims below this either by making a separate claim for each different account with the same bank, or if you're just a £100s above the limit consider lowering the asking amount down to £5,000 (even if your earlier letters demanded more).

  • There are different limits in Scotland and NI. In Scotland the small claims maximum is £3,000 in Northern Ireland it is £2,000.

However cases that are contested and seen as a difficult case, can be tried in the county court as a non-small claim (on what are called the 'fast track' or the 'multi track'). In the event that happens to you be aware that means your protection from the banks asking you for costs if you lose has gone.

Making a Claim - Costs And Risks Summary
(England & Wales)
Fees
As well as the initial application fee you paid (of £25 to £100 to start your claim), you may need to pay a Court Allocation fee of £35 if your claim is over £1,500 (and if you’ve not already paid this) and the Hearing fee of £25 - £300 (depending on the amount of your claim). These can be waived for some on lower incomes (see Court leaflet)
Will you need to pay the bank’s costs? For claims under £5,000 it’s very likely you’ll be allocated to the small claims system meaning costs shouldn't be awarded against you. Yet that’s never guaranteed, and if you’re allocated to a different track, have a claim over £5,000, or the court feels you have taken the case without correct cause, and lose, then the banks can ask for possibly substantial costs to be awarded to them.
If you lose
You will not get any of the fees you paid returned.
Possible winnings
You should get all the applicable charges returned, plus interest and all of the court fees you have had to pay.
The difficulty
The old standard template are unlikely to work now, you’ll need to spend time and use nous to personalise your claim. You may also find yourself in the position of needing to go to court to argue complex law against the banks. It may not be easy and there’s no guarantee of victory.

Your legal submission – Particulars of Claim

The real meat of your claim involves filling in a form called a ‘Particulars of Claim’ (POC) (‘Statement of Claim’ in Scotland). This is the legal argument you are requesting to be taken into consideration. As it will be long, it's unlikely to fit into the online claim form so you will need to post a copy to the court within 14 days of starting your claim.

In the early days of bank charges this was relatively simple, you downloaded a template to do it, submitted it, and the banks often didn’t contest so you won by default.

Now we have to assume the banks will put up a fight – which means they will be tearing what’s written apart, so these need to be polished bespoke documents now. Before looking at our sample template it’s important you understand the game has changed.

You may need to be specific on the terms of your account and fairness

When going through the POC you should include details of the specific terms you feel are unfair to help your case. If you do not include this now the court may ask you to provide the information at a later date so at least ensure you have a copy of the each of the terms and conditions that have applied to your account to hand.

If you don't have copies, it's very important you contact your bank to ask for a copy or check for past terms on consumer forums.

You should also mention as many specific occasions where you feel the charges were especially unfair as you can (eg when you were charged, why and the financial impact it had on you).

If you’re at all unsure get legal help, but be aware you are trying something new and untested so help may not be that easy to find.

While every effort’s been made to ensure this article’s accuracy, it doesn’t constitute legal advice tailored to your circumstances. If you act on it, you accept that you do so at your own risk. We can’t assume responsibility and don’t accept liability for any damage or loss which may arise as a result of your reliance upon it.

Template letters

Free samples to adapt and send

The following are sample POCs to get you started, yet it's very important you...

Ensure yours is completely appropriate and bespoke for your needs

Pick which sample is best for you. If you find them confusing seek any available legal help or discuss with others in the Bank Charges Forum.


A personal note from Martin –
who should do this?

Quote I’m passionate about the justice of the bank charges campaign – but it is important to temper that with the real practicality. While the successes are already coming through from going to the Ombudsman – going to Court is a very different scenario.

As we’ve been putting together this guide – I’ve been wrestling with how to ensure we balance up providing the info and resources that we’ve always promised with allowing people to continue the campaign while managing expectations – so I wanted to take time out from the main text for this little personal note.

Prior to the bank charges test case, many found going to court was the easy route, you put in a claim, the bank didn’t defend, you won by default and got the cash.

That’s extremely unlikely to happen now. Going to court is unlikely to be easy and frankly most people shouldn’t attempt it. To do so you may need to write a bespoke legal complaint, ensure you understand what are new and untested complex legal arguments and maybe even go up against the banks barristers.

There is no guarantee of success, lose and you could lose court fees of £100s, and in extreme examples, if your case wasn’t dealt with by the small claims system, risk having to pay the banks costs.

For some it’s still worth it, both for the justice of the campaign, or because your finances are so dire anyway there’s no risk – or you are confident enough to go to court comfortably.

Yet it really isn’t the right option for most people – which means if you’ve had charges and don’t fit the Ombudsman’s criteria, it’s at this point you may need to accept you won’t get your money back or at least wait to see others are successful. I'll put updates in the weekly email."

Do also see the Q&A at the end of the Bank Charges guide for possible future hopes.


What happens after submitting a claim?

After you've submitted your claim, what happens next depends on the bank's reaction.

Remember the decision whether to hear a case or not lies with each individual court so the information here is only a guide to what could happen. Plus the decision on fairness itself can only be made by the judge who hears your case. Yet it’s likely most judges will follow the same view.

  • The bank settles in full. Chances... very unlikely

    The banks' reaction to a challenge under these arguments is tough to call. Certainly, mounting a defence in court is likely to require them to explain how they reach the £35 a time cost. This is something they've been very reluctant to do in the past – and probably one of the main reasons why they made ‘goodwill payouts' in the early days.

    So it's possible that under these rules, and for the sake of expediency, the bank may settle as a 'goodwill gesture', including interest and court fees; though it almost certainly won't admit it ever did anything wrong.

    Yet of course there is no way of knowing this will happen. Realistically, we think it’s unlikely at the moment, but there could be a chance if you have a small claim.

  • The bank does nothing. Chances... unlikely

    Sometimes the bank simply won’t acknowledge a new claim on time and this means you automatically win by default 14 days after the claim is served (which takes 5 days). At that point, you must request 'judgment by default', this can be done online, and you should do it as soon as possible (get it in your diary and plan around it to the second if possible) after the 14 days ends.

  • The bank asks for more information. Chances... likely

    If the bank thinks you have not given enough information for it to enter a full defence it may ask you to provide further details. This could become part of the court process where you will be given a date by which to send the information to your bank. This will be more common if you have not personalised your claim enough, but at the moment we don’t know how common it will be.

  • The bank defends the claim. Chances... very likely

    We know this is the point where people get scared, though hopefully if you decided to go ahead with this you were prepared that this may happen and have done your research into the law so you can argue it. Again, we don’t know how common this will be, but from here on in you're now in the proper court process.

    If you’ve not already done it, there's a straightforward form called the Court Allocation Questionnaire which you need to fill out and return to the court with a £35 fee if your claim is over £1,500 (it's free below that amount). The next stage should be a small claims hearing date, and if you get to this stage, there is a further fee of £25 - £300, depending on the amount of your claim.

    If you reach this stage, a bit of work and research beforehand is useful (and it'll make you feel more confident) in case you have a hearing. If you don't know what to do, go to the Bank Charges forum where other MoneySavers will try and help you.

    As it stands we don’t know what response we’re going to get from the banks but we’ll be monitoring the situation and any changes will be added to this guide and will be included in the free weekly email.

    Please report successes and failures in the Bank Charges court claims forum feedback.

Where to get further help?

UPDATE: This guide hasn't been updated since 2010. Very few have tried this system and we've not had any successes.

Unfortunately we aren't able to offer individual help but this guide is hopefully a good starting point to making a claim. If you’re taking on a case then it’s important to get as much information as possible, the following are resources that may be able to give further information:

Collaborative online resources

One of the best sources of information is other people who are in the same boat – discussing and sharing resources with them. Though do always remember just because someone else is doing it, doesn’t make it the right way.

  • The MSE ‘Bank Charges’ Forum

    There’s this site’s Bank Charges Forum where many reclaimers discuss things. If you have been through a reclaim yourself please do see if you are able to pass on your benefit of experience to others.

  • Other Consumer Help forums

    There are also a number of very good smaller free fellow campaigning websites dedicated to reclaiming unfair charges and helping consumers.

    The ConsumerActionGroup is a focused web forum based around reclaiming charges; it's run by a group of people who took on the banks in the very early stages. PenaltyCharges is run by a law lecturer who successfully took on the banks and campaigns on the site and Legal Beagles has regular updates on the campaign.

    We have been in communication and sharing information with the above groups – many of whom are passionate campaigners who may be able to occasionally help on a one-on-one level.

  • Personal help may be available from Citizens Advice

    Some free legal help may be available from your local Citizens Advice centre, but as this is new complex, untested law it’s unlikely to be able to help too much.

Getting legal help

Some lawyers, or claims handler as they’re commonly advertised, say they can get charges back for a fee, yet they have no more influence or power than you do. A number of firms even have notes saying they’re waiting for the legal info from this site before continuing (not with our permission, just using it).

Yet while normally we are averse to claims handlers, as they are taking money that you could keep yourself, taking a bank charges court claim now is much more difficult so getting some bespoke help (even if it means giving up a share of your winnings) might not be such a terrible idea.

If that’s the case, it's important to check out who you would use. If you are going to use a lawyer or claims handler ensure you:

  • Never pay anything upfront

    There are a raft of companies now offering to take on your claim for an upfront fee – don’t touch these with a barge poll. Now success is uncertain, they simply know they can make money from this fee and there have been cases where no job is done, but no fee comes back.

    Instead go for a no win no fee operator and as a rule of thumb you shouldn’t pay much more than 25% of what you win. Also feel free to ask for references from other satisfied customers, which it should be happy to do if kosher.

    These may not be as easy to find as before, claims handlers like easy victories, so many will be happier to take on Ombudsman cases – but for the pure bank charges case it could be more difficult.

    All claims companies must be regulated for claims management activities and will have a reference to check (eg CRM1234) on the Ministry of Justice database. Avoid anyone not on this list.

  • Understand the risks

    Just because you are with a claims handler, even a no win no fee, it is unlikely to mitigate the risks of claiming – in other words that you can lose your fee and if you’re not in the small claims track there is a potential to have costs awarded against you.

Join in the Forum Discussion:
Bank Charges Court discussion
If you haven't already

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