How To Get Your Money Back

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If you think your bank has been unfair to you, there’s a lot you can do to get those charges back. The piece of legislation that applies is the 1999 Consumer Credit Act (Unfair Terms in Consumer Contracts). Under the law, you can claim for any unfair charges made in the past six years (five years in Scotland). There are six steps you can take to get your money back.

1. Open a new bank account

The reason for doing this is that many banks fight claims in any way they can and this may include closing your bank account if you make a successful claim. They may also keep records indicating that you are a difficult customer, which may have an effect on any future dealings you may have with them. Although you may not end up needing the account, opening one is a form of insurance so you don’t end up without one.

2. Gather your history

Before you can make a claim against the banks, you need to know what they have charged you and whether it is unfair. If you’re a hoarder who keeps all your bank statements, you will already have all the evidence you need. But even if you have shredded all your statements, there is still a way to get information on bank charges. Just write to your bank to ask for the information. Under the Data Protection Act, they have to give it to you and they should not charge more than £10 for the information.

3. Write to your bank

Once you have the information on the charges you consider to be unfair, write to your bank to say that you are unhappy. Give specific details of the charges you want refunded and any other relevant information, such as the applicable point of law. There are many websites that offer templates that have been used successfully to reclaim thousands of pounds’ worth of unfair bank charges and overdraft interest. If the matter goes to court, you will be able to claim interest at 8 per cent on the money the banks took from you, so some people suggest asking for this at the outset as a negotiating tactic.

There are two types of letters that you can use. Use letter 1 where your bank has charged you for declined or ‘bounced’ transactions only. You should use letter 2 in all other cases, including where transactions have been paid resulting in an unauthorised overdraft and charges. Permission to reproduce these letters was kindly granted by the Govan Law Centre, Glasgow

Letter 1

Letter 1 pdf

Letter 1 word

Letter 2

Letter 2 pdf

Letter 2 word

4. Wait for a response

In the letter, you should give the bank a deadline to respond. There are two possible outcomes. The bank may ignore you, in which case you go to step five. Alternatively, the bank may offer a full or a partial refund. In most of the successful claims, the banks have avoided going to court. That also means that they have not had to reveal details of what it actually costs them when a customer goes overdrawn without authorisation.

5. Write another letter

If you are not happy with the response or the refund arrangements, write a second letter advising that you will take legal action or refer them to the Financial Ombudsman Service. Again, give a time limit within which the bank must respond.

Here is an example of a letter you can use. Permission to reproduce these letters was kindly granted by the Govan Law Centre, Glasgow

Follow up letter

pdf

word

6. Take It To Court

If you are still not happy with the bank’s response, it’s time to take it to court. Procedures are slightly different for England and Wales, Northern Ireland and Scotland. The amount you can claim varies too. Consumers can claim £5,000 in England and Wales, £2,000 in Northern Ireland and £750 in Scotland.

The basic procedure is to complete a Small Claims Summons Form in Scotland or an online form through Moneyclaim in England and Wales or the Northern Ireland courts online. Pay the applicable court fees, which vary depending on the jurisdiction and the size of the claim. Expect to pay up to £39 in Scotland, up to £62 in Northern Ireland and up to £120 in England and Wales.

There is a time limit within which the banks should respond. They may settle in full, though they are unlikely to admit they are at fault. Or they may do nothing or enter no defence, in which case you may win by default. Only in a few cases do the banks contest such claims. If they do, then there are many consumer websites which will be able to provide additional guidance on the process.

There are also many organisations which will manage the whole process for you on a no-win, no fee basis. This can save you time and money, especially as some of them are able to make quick out-of-court settlements with banks. However, this service is not cheap. You should expect to pay 25 per cent of the sum reclaimed if you are successful.