Forums Forums Wirral Information Law And Your Rights Illegal Bank Charges - Claiming Them Back!

I think there has been a topic on this before many many moons ago, but I though I would start a fresh one, and include the progress of my claim.

Right, im sure everyone know's what illegal bank charges are by now, so I won't go into it in detail, basically a bank charges you for say going overdrawn. However, it does not matter what their terms and conditions say, and the fact that you agreed to them when you signed up for the account, they are only legally allowed to charge you what it costs them to administer the service, they not allowed to make a profit on the charge. A recent BBC Working Lunch/Money Program independed analysis and report worked out that at the very maximum, it would cost a bank between £2.50 and £4.50 to process the service charge. So anything above this means the bank is almost certainly making a profit on the charge.

I havent had many bank charges over the years, but had the odd one every now and again. Ive often thought about claiming the charges back, but never really thought I had enough to warrant it.

Anyway, last month I got a charge of £23.00 applied to my account for going overdrawn for 2 days by £2.31, so I immediatly decided enough is enough and started working things out to claim all the charges back that I have had over the years.

So I went to Martin Lewis' site, Money Saving Expert, for some help doing this. Although Martin Lewis is often credited as the guy who started it all off, he never, he just tapped into something that was already happening, however his site is an excellent resource for anyone who wishes to claim their bank charges back.

Using my internet banking, which allows me to look my last 6 years statements, I worked out that over the years I have had 9 individual charges applied to my account, equalling up to £223.00. After I added the standard court rate of interest of 8.00% (this can all be done very easily using Martin's interest calculator), the interest came to £24.66 and the grand total the bank owes me is £247.66.

So I decided to use the template provided by MSE to write a letter to my bank. I sent the letter on the 7th March 2007 from a post office and got proof of postage.

Anyway, I thought I would have heard something back last week, so I begun to suspect that the bank may not be very inclined to respond, but nevertheless I thought I would give it till next week to hear something.

Anyway, I have recieved a letter today from the "Senior Service Quality Officer" (handsigned, not very often that happens nowadays - probably a secratary but better then nothing), informing me that they have recieved the letter and are looking into the matter for me and will respond as soon as possible with a resolution the matter. They also included a leaflet on their policy with regards to bank charges and another one with their customer service charter and a reference number should I wish to contact them regarding the issue at any time in the future.

So far so good. I didnt want to claim the charges back to be honest, as the bank have always been very good to me, helped me a lot with my finances, and always have a friendly face for me to have a chat to when I want to discuss something at my local branch. But I feel that £23 for going £2 overdrawn for 2 days is just far too much, so I decided to get everything back. Or at least try anyway.

I will keep you pedigree chums updated on the progress of my claim.

Has anyone else tried to claim charges back? How successful have you been? What are your views on bank charges? I dont particuarly mind them, however it is not very often I am charged. I think they are the ultimate scurge of the earth in general though, its the people who can least afford it who get charged the most.

Look forward to hearing from people on this.



If you are thinking about claiming your charges back, its very easy to start the process, visit this Money Saving Expert web page for all the information, tools and template letters.

Good luck with it, hope you get back every penny.

I've made sure I've never gone overdrawn, so I've never been charged.

I think it's rediculous the amount of the charges that they take. It should be administative costs only that can be redeemed and it should be stated in the banking code so that all banks have to abide by it.

I know a few people who are doign the same, but havn't received a reply yet months after sending letters.




It's the way businesses work Matty, you should know this

Don't forget though that even if it was in the Banking Code, this itself is only voluntary.

An OFT report should be out in April/May this year, which is expected to make a recommendation to make it compulsary that a maximum charge of £12.00 should be implemented.

Whilst I believe this is a step in the right direction, it still isnt enough. However it does mean that the banks will become automatically liable for charges of anything over £12.00 from the last 6 years.

ahh I didn't know that the banking code was only voluntary

For those who didn't know OFT = Office of Fair Trading

Right, I hadnt heard anything so yesterday I sent a message to my bank via the online banking service requesting an update on the progress of the claim, and it looks like they have got their arses into gear and decided to make me an offer:


So now I will await the letter and see what it says, and more importantly, if the refund is anywhere near worth accepting.

I shall keep you informed.

With regards to the time its taken them to process it, either they genuinely sent the letter/offer out prior to me contacting them, or they did it because i applied a little pressure to them by sending the message to them. Cant really tell. Id be inclined to side with the pressure thing, but it would have been a quick decision for them to make lol.

For them to make an offer at this stage would be great to be honest, its still only the first step, most people have to go a lot further to get an offer made, a lot have to go to court lol.

I suspect an insulting offer.

We can only wait and see. Im only attempting to claim £200 and odd back, so anything in the £150 region would be good. I cant say what I am expecting atm as I simply havent got a clue.

Have you got any experience with claiming charges back from the HSBC??

I've now done this for two people, and am waiting to hear about the second. I have spreadsheets and legally worded letter templated all set out ready to use. Got a good few hundred back for one person and am expecting a couple of hundred for another.

Best of luck Matty

here u go guys! use this:



[YOUR NAME]
[YOUR ADDRESS]
[DATE]
[BANK NAME]
[BANK ADDRESS]

Dear Sir/Madam

Penalty & unfair charges – request for refund for [Your name, sort code and account number].

[Details of charges]

0n 5 April 2006 the Office of Fair Trading (OFT) announced that default charges which are set at more than £12 will be presumed to be unfair and unenforceable in terms of the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). Charges above this sum will be subject to legal action by the OFT (press release 68/06 – online here: http://www.oft.gov.uk/News/Press+releases/2006/68-06.htm).

The OFT stated that a charge is not fair simply because it is below this sum, and I believe that a reasonable charge would be 50 pence for the reasons set out below. Please refund my charges as a matter of urgency.

I would respectfully submit that if your organisation does not agree to immediately refund all unfair charges applied to my account, it will not meet the ‘fit and proper person’ test to hold a consumer credit licence under the Consumer Credit Act 1974. In that eventuality, I will submit a 1974 Act complaint to the OFT.

Separately, I am of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79.

Your charges do not reflect any actual loss, instead they appear to represent a lucrative profit-making scheme. In particular, charges were applied after I entered into a transaction(s) without sufficient funds in my account. However, payment was declined by you, and therefore, actual loss is the cost of automatically sending me a computer generated letter. I would respectfully submit that is valued at no more than 50 pence.

UK banks have recently given evidence to the House of Commons Treasury Committee on how bank charges are calculated: "The costs are going to pay for all the people we have who pursue debt, collect debt, speak to customers and chase payments. The way these charges are arrived at is by taking these total costs and making some assumptions about the volume that is going to come through to arrive at the individual charges" (2nd report, 25 January 2005, paragraph 50 – online here: http://www.parliament.the-stationery-office.co.uk/pa/cm200405/cmselect/cmtreasy/274/27405.htm).

Accordingly, the charges applied to my account are not a reasonable pre-estimate of the bank’s loss in relation to my account. No-one has had to look at my account or telephone me. No one has had to collect anything. Your charges would appear to represent a device to recover global losses (for example, loan defaulters, bad debt write off, including commercial lending in, and outwith, the UK).

Please refund all charges applied to my account within the next 7 days. I reserve the right to commence court proceedings without any further notice, and to seek an additional award for distress and inconvenience, together with legal expenses.

Yours faithfully

Hehehe just got the offer letter from the HSBC. The very first words are written in bold letters and capital's to make sure I notice them, WITHOUT PREJUDICE, presumably to re-assure me that their not going to hold it against me/close my account like some banks have done in the past.

I claimed for £223.00 total bank charges + £24.66 interest. They have made an offer to pay me the full £223.00, which I think it pretty amazing!

So all I have done is downloaded a template letter, spent 5 minutes looking over my statements and using the interest calculator to work out interest, the sent off a template letter at the cost of £35p, and in return, less then two months later, I will be getting £223.00 back!

£223.00 - I claimed my bank charges back - you can too!!!

I have only ever gone overdrawn twice and they didn't charge me as i had a good account history.

So i have nothing to claim

Ive never been overdrawn, so have never had to face these charges.

However unreasonable / unfairly high, they are though, what would happen if the bank didnt pay them on your behalf - late payment demands? CCJ's? Gas / electric cut off?

Im not trying to justify what they charge you, you the other side of the coin as to why they charge you, and that they may actually be doing you a favour....

A favour that costs you £20-£35. I have known of banks charging you for their errors.

Quality - just checked me internet banking and found that they have credited my account today. Only sent the letter back on the 18th May, they recieved it on Monday (Recorded Delivery tracked for security) and they said it could take upto 14 working days for a refund to be processed and appear in my account!

£223 extra in my bank account and just before I go to Holland - its like having a savings account I never knew I had!

Cheers HSBC, I will have a good few beverages on you in Arnhem and Amsterdam haha!

Update for people interested in claiming back bank charges: https://www.wikiwirral.co.uk/forums/ubbthreads.php?ubb=showflat&Number=172447#Post172447