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Those cheeky bankers have been getting away with imposing obscene charges for far too long. Which is why it’s great news that thousands of people all over the UK have now been refunded all the bank charges they incurred during the last six years. And now you can become one of those people. Because it turns out those naughty bankers have been charging way over the odds. In fact some organisations go so far as to say the banks have been acting illegally.

We certainly know what it’s like to get a letter saying you’re overdrawn by 50p so you’re being charged £30. And a lot of you might have experienced the same thing. It doesn’t half wind you up.

But now you can get all those charges back plus interest. Here’s how:

1. The law: when you open an account you’re entering into a contract. So if you go overdrawn or a cheuque you write bounces then you’re effectively breaching that contract and charges for doing so can be applied. However those charges have got to be appropriate to what it costs the bank. According to some retired bankers £2 tends to more than cover their costs – so charging customers £25 or £30 is actually imposing a penalty, which ain’t right.
2. The charges: what you’re looking for is the bank charging you for sending out a letter, charging you for a failed direct debit or bounced cheque and excessive overdraft charges.
3. Figure out what you’re owed: go through the last six years of your statements. If you haven’t got them, get them from your bank. They might charge you £10, but they have to give them up within 40 days. Don’t let them stall you with forms and all the usual nonsense, tell them you want those statements under the Data Protection Act and they’re obliged to provide them.
4. Write to the bank: and ask for your cash back. A couple of days after you’ve sent the letter give them a call and confirm it’s been received. Make sure you note the time, date and name of the person you spoke to.
5. What does the bank have to say for itself: you should receive an answer within a couple of weeks. If not chase them up. If they offer you partial refund then our advice is to hold out for the full amount. And if they give you the old runaround saying the charges are legit or they’ll come back to you later, tell them you’ll see them in Courts (and not the sofa shop neither!) You might get lucky though and find you get a full refund straightaway – it’s happened before.
6. Research your next step: chances are you’ll be claiming less than £5000, which means you’ll be filing a suit in the small claims court. Its worth checking out www.hmcourts-service.gov.uk and www.consumeractiongroup.co.uk for more info. But according to people who have successfully got their cash back things never end up in court. And even if they do with small claims you won’t be liable for the bank’s legal fees.
7. Stake your claim: either nip down the local County Court and make a claim in person or do it from home with the courts services’ online Money Claims service. It’ll cost you between £30 and £120. The bankers have got 14 days to respond to your claim. If they don’t you win by default. They might get an extension of another 14 days, but again if they miss that final deadline you win again. Some bankers are putting in a defense at the last minute though. If that happens, then the next step will ensure you still beat them.
8. Final action: in the really unlikely event the bankers go this far, then you’ll get a Court Allocation form to fill in. Do it, send it back within a week and mail a copy to the bank as well to show them you’re in charge now. If you get a court date check out www.consumeractiongroup.co.uk where you’ll find plenty of advice and support. When the court date comes around, the bank won’t show which means you win by default.

One final thing worth saying is you might want to consider moving your bank account, loans and credit cards to somebody else if you plan on taking your bank on. And if you do take them on, then best of luck and let us know how it goes.

Filed under: Top Tips, Sound Advice, Save Money