The Tories have today declared bank charges "unfair" in the party's white paper on financial regulation.

It is believed to be the first time a major political document has taken such a tough stance on charges of up to £39 a time for going just a penny over your overdraft limit.

The question is, how far will the party go? If it believes the charges are unfair, will it support the automatic wholesale payback of all unfair charges to reunite consumers with THEIR money?

It's thought nearly a billion pounds of charges have been reclaimed. So far, 6.1 million free bank charges template letters have been downloaded from this site alone.

Victims are still submitting claims to get in the queue (for free template letters, see the Bank Charges guide), even though reclaiming is on hold, awaiting a House of Lords decision in September on an historic test case to determine the fairness of charges.

However, those in financial distress can claim now (see the Bank Charges Hardship guide).

What the Tories say

The Conservative party white paper says: "Much of the analysis of the financial crisis has focused on the Financial Services Authority's inadequate regulation.

"But in the past few years there have been numerous examples of unfair treatment of consumers – the misselling of payment protection insurance and unfair bank charges are just two of the largest currently unresolved examples."

They need to put up or shut up

Martin Lewis, the creator of, says: "The fact the Conservative party officially believes these charges to be unfair, is great news.

"It's to be hoped the Tories put their money where their mouths are. These unlawful bank charges were taken from people's accounts without asking.

"No other companies have the power to grab your cash in this way. If your energy supplier has a dispute with you, it needs to take you to court to get the money.

"Once the courts finally decide that they're unfair the only right decision is for everyone who's had a bank charge taken to be given the money back without needing to ask for it.

"Of course, this means a payout of perhaps £3 billion to £5 billion. If the Tories genuinely believe these charges are unfair, they must support this outcome too.

"Though with the nation's finances in such a dire state, what better way to immediately stimulate the economy than getting this money back into real people's hands."

Test case ongoing

The House of Lords is currently considering an appeal by banks against an earlier ruling both in the High Court and the Court of Appeal that bank charges are subject to fairness laws. If that appeal fails, the Office of Fair Trading (OFT) will decide on fairness, and it's provisionally stated they are unfair.

Yet the case is primarily about current charges, and it is uncertain the impact the result will have on those wanting to reclaim. While it's likely to be a huge help and make it very difficult for banks to fight claims, the likelihood is customers will need to apply or fight to get the money back, rather than simply being given it.

The Tories, should they get into power, propose to establish a Consumer Protection Agency to shield the public against bank mistreatment, though it's unclear how this would impact bank charges

The Labour government's white paper on financial regulation, published earlier this month, included proposals to create a mass reclaiming body to instigate group compensation claims on behalf of large swathes of consumers, where necessary. It identified bank charges as a major issue but did not brand them unfair.

Three years too late

Martin Lewis adds: "Finally, some politicians have got off the fence. The only shame is, it's three years too late. It's not exactly political bravery to call these charges unfair now that banks have become the bogeyman, and we're at the final test case stage at the House of Lords, with the banks having already lost twice.

"Where were the Tories, or any political party for that matter, in the early days, when people were having their bank accounts closed, and being mistreated at the first attempts to get their bank charges back?

"Now this has become the biggest consumer revolution since the poll tax riots, finally, the political elite want a piece of the action."

Further reading/Key links

Fight back: Bank Charges, Bank Charges Hardship