Fifty percent of fee claims exceed one thousand pounds

A recent report from This is Money has revealed that fifty percent of those claiming back unfair and unlawful charges from their banks are making claims for one thousand pounds or more. Banks have been charging their customers for going into the red or exceeding any agreed overdraft limit for years, and have been applying hefty fees of up to around forty pounds in some cases when a customer exceed the overdraft limit.

However, last year investigations were carried out by the Office of Fair Trading, the Financial Services Authority, and other regulatory financial bodies, and it was concluded that since these charges came nowhere near reflecting the actual cost incurred by the bank, the fees could be deemed unfair and unlawful. With administrative fees costing the bank just a few pounds, some banks have been charging ten times that amount when a consumer goes over the limit – and so far no bank has justified the charges.

Following the revelations from the financial authorities, many consumers have now contacted their banks and asked for a refund of these fees, in some cases going back six years. Many have already claimed and others are still in the process. And according to the new research by This is Money one in every two claims being made for a refund in charges is for over one thousand pounds – reflecting the huge profits that banks may have been making for many years by charging consumers these extortionate fees for going into the red, even if just by a small amount.

Consumer groups and financial watchdogs are urging consumers to continue attempting to reclaim their fees, even if the bank refuses at first. So far, no bank has turned up to court to justify the charges, with some settling claims just prior to court action and even as a result of consumers sending bailiffs round.