My Unlawful Bank Charges Victory!

How would you like a full refund of all your bank charges, including the interest and petty court costs, PLUS a £100 gift? Thank you very much!

Since May, I have been writing articles about my claim to recover unlawful bank charges and the simple process you need to follow if you wish to do the same.

In my last article on the subject, I explained that I'd sent the final paperwork to the court and that all that remained was for the court to set a hearing date. However, I didn't expect the case to actually go to court, as the banks have been settling before it gets that far. I was right!

I received a letter from my bank's solicitor last night saying that the bank has now settled my claim. There was neither an admission nor a denial of liability. They simply said the claim had been paid into my bank account.

Which is true. I checked my old bank (I switched current accounts long ago to get a better deal) and they had paid the money in. The payment covered all the charges, the interest, the minor legal costs and, for no apparent reason, they gave me an extra £100 or so, which almost doubled my claim!

In the absence of a denial of liability, I'm going to assume the extra money is not an error, but in fact it is compensation for how poorly they have treated me...and possibly for keeping my mouth shut. Whoops!

The final step (after you've received settlement)

My old bank hasn't written to me stating that they're going to close the account, which is what they have done with some other claimants. So I'm going to transfer the money out and close the account anyway.

This leaves just one important task: I must write to the court as soon as possible to let them know that this claim has been settled to my satisfaction; I'll do that this evening.

And that's the end of that chapter!

An alternative way to claim: the Financial Ombudsman Service

People who have complained to the Financial Ombudsman Service (FOS) have been successful. Chief ombudmsan Walter Merricks said recently: "Banks are writing off default charges of customers who complain to us - with the result that we have not had to issue any formal decisions in complaints of this type."

Elsewhere, he said: "We are now receiving large numbers of complaints about banking default charges. We have learned that some firms, when faced with a complaint, first respond by saying the charges are justified. If the customer presses the point and threatens to refer the matter to us, they are offered a write-off of half of the charges. If the customer issues court proceedings.or actually refers the matter to us, the whole of the charges are written off."

That's a neat summary, although sometimes people are offered 90%, not 50% to settle without a formal complaint, which may tempt you. Before you accept this though, remember that the bank has charged you unlawfully, so you are entitled a full settlement. If you have a big claim, that missing 10% will make a difference.

The Financial Ombudsman Service is free to use. Their decision is not binding, so if you're not happy you can still make a claim in court (although if you accept the FOS's decision you can't claim in the court as well). It's also likely that claims to the FOS will be settled faster and for many people with a lot less stress, so it may now be worth going through them before considering court action.

> Read The Ultimate Guide to Reclaiming Bank And Card Charges.
> Get a parachute account in case your bank tries to close your account.