How to reclaim your bank charges
Charges incurred by consumers for going into an unauthorised overdraft or issuing a cheque without adequate funds in their current accounts have been hitting the headlines recently, with a number of complaints lodged against financial services providers.
While it may be tempting to join these claimants in attempting to recoup money lost in the form of such penalties, there is a procedure to follow in order to do so, which offers the protection of third-party regulatory bodies.
It may also be worth considering what the eventual aim of the process is - many consumers have settled out of court and recovered some or all of their fees, while others are pursuing their bank into court as they attempt to establish a basis for punitive damages.
Meanwhile, it may prove difficult to get a claim handled at all in the current legal climate, as service providers and claims processing bodies have been given permission from the Financial Services Authority (FSA) to put things on hold.
This is a temporary measure expected to remain in place until a test case brought against the financial sector by the Office of Fair Trading (OFT) is decided - at which point the legal environment regarding current account charges is likely to be clarified.
Complain to your bank
While banks are currently not required to process claims, it is still possible to register an objection to any charges which have been made, while aspects of a complaint which relate to areas of banking other than charges are still to be dealt with, according to the Financial Ombudsman Service (FOS).
The FOS urges consumers to contact their bank directly initially to attempt to reach a resolution, as "many complaints are caused by misunderstandings that the business can quickly put right, once you explain the problem".
Meanwhile, the service adds that firms are obliged to inform customers when making a complaint that they are entitled to refer the case to the FOS if they are not satisfied with the outcome.
While the FSA has issued a waiver on time limitations for such issues to be handled - initially to stand until the outcome of the OFT case is known - conditions have been put in place by the authority which require banks to ensure customers are not unduly burdened by having their claim delayed.
The authority continues that banks are expected to take steps to prevent excessive current account charges from being incurred by their customers in the first instance.
Complain to the FOS
If a satisfactory conclusion is not reached with the provider of the account, the FOS offers an independent regulatory process through which a complaint may be pursued.
The ombudsman considers each case on an individual basis, with judgments based on the factual merit of the circumstances and not on the legal wording or quality of the application itself, the FOS states.
"We decide if your complaint is valid by looking at the facts of the case - not at how well you present your complaint - and we prefer to hear from you in your own words," the service explains.
The FOS has also suspended its claims processing in light of the OFT case, although it suggests that the development is likely to clarify the issue for future claims.
"For the county courts and the ombudsman service, the High Court test case should mean that very significant volumes of cases can be managed in a fair, cost-effective and orderly way," it predicts.
