How to claim back unfair bank charges

Bank charges usually only happen if you’ve broken through your overdraft limit. The average fee amounts to around £15, but can reach up to £35 in one go. If you are knocking on your overdraft’s door, it’s likely that you aren’t exactly Mr/Ms Moneybanks anyway, so these charges can be a real kick in the teeth. It is possible to claim them back, with the right approach.

If this is a first-time charge, you should be able to call your bank and coerce them into wiping it. But if you have time-and-time again dipped over your overdraft, this guide is tailored towards you.

Take the money back

There is no guarantee that you will successfully claim back your bank charges, but there is a free path for you to make a claim, so you might as well! Don’t be disappointed if you lose out.

Be positive and use your powers of negotiation. The bank obviously doesn’t want to part with its money, so it is up to you to pry it from their fingers. Your bank is obliged to treat their customers well and follow the law – remember, you don’t have to be with this bank, and they know it.

Financial hardship

You can appeal the charge by claiming financial hardship. The Standard of Lending Practice, an agreement every major bank has signed up to, states that banks should act considerately towards those who are struggling with their money. You need to meet several of the following criteria to have a case:

  • Can’t pay for necessities like bills, food, and rent
  • Can’t pay off debts
  • If you have a very minimal income, and the charges take a huge lump out of your salary
  • Payments returned often because you have no money in your account
  • Experienced a decrease in income: job loss, divorce, death of spouse, starting a lower paid job
  • You’ve gone into full time education or need to take parental/carer’s leave
  • Your expenditure has vastly increased due to disability or illness
  • You are going bankrupt or into debt management
  • You’re living off credit to make ends meet
  • You’re often over your overdraft limit and have accrued hefty fines
  • Bank charges have made your financial difficulties worse
  • If you slipped over your overdraft just by a few pounds

Writing to the bank

So you meet some of the criteria required to make a claim; how do you approach your bank? Write to your bank, appealing the banking charges, based on financial hardship. Be sure to add evidence to your letter to substantiate your claims and ask them to respond within 2 months or you’ll take your case to the Financial Ombudsman.

Their response

You should receive a letter of acknowledgement. Hopefully they will react immediately, but they have up to 2 months to respond to the complaint. Eventually, you should get:

  • A full refund
  • A partial refund. Don’t be afraid to negotiate this offer, based on what you think is fair.
  • A refund, but only if it is used to pay off your debt. This may be useful- you have had a full refund after all.
  • A financial statement form. Fill this in as soon as possible and send it back, and wait for another response.
  • An offer of help, but no refund. They may not bill you for further bank charges etc. If you are happy with this, accept it.
  • A rejection. Don’t give up! Call or write another letter.
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