UNFAIR BANK CHARGES

If you exceed your overdraft limit or write a cheque that bounces, you are technically in breach of contract. That’s because you signed the terms and conditions form stating that you’d stay within the authorized limit. Legally, your bank can only claim back only the losses it has suffered due to your actions.

Your bank might be able to argue that you should pay additional interest on the extra borrowing, or even a very small sum for the cost of the automated letter and stamp. This should cost no more than £2.50 – and the banks are reluctant to prove otherwise in Court.

Charges of £20, £30 or £40 are penalties or fines (not losses) - and are simply unfair terms under the ‘Unfair Contract Terms Act 1977’.

Did I sign the terms and conditions with the bank saying they can charge me?

Yes, you probably did, but fortunately it’s trial by judge, not trial by bank! If the charges are penalties and not direct losses then the Court would probably find that they are unfair contract terms, which the Judge could simply disallow.

Hang on; I thought the banks won some recent cases?

They have. But at the same time, they’ve been seriously criticised by Judges for misleading customers. They only won these cases on technicalities. So, they do everything they can to keep future cases out of Court. And the good news is that the law is on a new-claimant’s side. Our lawyers are experts in recovering bank charges.

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