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Bank With Care And Make Sure You Know Their Account Charges
By Tony Lucas
You need to be careful who you with and what charges you may incur in the event of being overdrawn or requiring any correspondence from the you choose. For example, we handle a lot of small cheques as part of our normal business. Occasionally, one of these may be bounced by the for a variety of reasons. As well as having the cost of trying to get our customer to pay the outstanding amount, we also get a charge from the of £30 because they have told us of the problem. We didn’t cause the problem so why are we charged? The person who issued the cheque will also be charged by their bank. Since the amount of the cheque is usually less than £30, we are losing twice over and the transaction has become not only worthless to us but a liabilty.


In theory, it is illegal for the banks or credit card companies to charge you for any item or action, if the fee levied is more than £12 and yet, many banks and building societies, credit card companies and loan agents, regularly charge £30 or more if they notify you of any problem with your account or card, even if the amount they are notifying you about is smaller than the charge they levy. We would contend that most charges should be abolished anyway. They make enough money out of us banking with them to absorb the odd hiccup, especially if it isn’t something we caused.

The OFT (Office of Fair Trading) ruled last year that they would consider any change above £12 as illegal and have started a court case against the banks to ensure that such charges can be reclaimed in full and with interest, by private individuals and companies. A ruling on the matter is due from the High Court later this month.

Before you decide which you are going to use, make sure you know their charge rates and let them know that you will not accept their charges if they

are above the legal limit. They will try to tell you that these charges or credit card charges are defined in their terms and conditions and that they are therefore permitted to make such charges. However, this is not the case. A or any other institution, cannot declare charges that are illegal as part of their terms and conditions and to do so is unlawful.

If you have been the victim of such charges in the past six years, you should register your intention to reclaim these charges with interest and there are several reputable companies that will, for a percentage of the recoverable sum, do all the work for you but beware of the usual cowboys. They should be licensed by the Ministry of Justice (I don’t know there was one either) and they should charge no up front fees. We used a company called BankSmart and were pleasantly surprised at the amount they recovered and the time it took to get it resolved. Well worth the 28% they charged for the service.

You can do it yourself but it can be a complicated and protracted matter, with the banks trying to reduce their liability as much as possible. They will pay in the end rather than go to court but will try to get you to settle for just the charge costs rather than the interest that has accrued as well. They may also try to pay the difference between the fee charged and the legal threshold. The reality is that they should pay back the whole sum with interest as it was not lawful to charge that amount at all. They will stall at every opportunity to try and get you to give up. If you have the time and energy, go for it yourself. If not, let one of the recovery companies do it for you. It will be a fee worth paying if for no other reason than to get back at the banks for the misery they cause to small account holders when things go slightly wrong with your account.
Tony Lucas has spent many years in the travel and tourism market, has travelled in many parts of the world. He has lectured and worked freelance for many of the major Hotel corporations. He writes extensively on all matters to do with Britain and tourism in the British Isles. More information on www.stayinbritain.co.uk Bank Smart - You can find them on: www.bank-smart.co.uk

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