You have not bothered to manage your account properly. You have borrowed money offered to you by your bank, and then not made sure you have left enough funds to pay for your direct debits or cheques. You haven’t even managed to put aside money to cover those bank charges. What makes you think you are entitled to any kind of refund and that you can reclaim your bank charges? It is your account and your responsibility, so why blame someone or something else?

Well to a certain extent it is your fault, it is your account and you spend the money available, just like we all do. That is the point, just like we all do. Years ago you would find it very difficult for your bank to let you spend more than you had and would have to jump through hoops to borrow even the smallest amount. These days it is openly encouraged; we all have offers landing on our doorstep which seem attractive but can have dire consequences. However, the level at which banks charge when it all goes wrong seems very unfair and there is an important point:

English law does not allow a penalty clause. If a bank cannot justify that it costs £25 - £40 to send you an automated letter advising you of an unauthorized overdraft then the fee is considered a penalty.

Excessive fees for overdrafts, returned cheques, unpaid direct debits and standing orders are all potentially unlawful.

What can you do? Well you can claim those bank charges back for free. You can get a list of charges from your bank. Interest can be added to those charges and you can write a standard letter to your bank asking for a refund. If you are lucky they will send you a cheque, but in most cases they will refuse. A second letter will then be sent informing them that they have so many days to refund or you will pursue the matter in the small claims court. Again they may refuse, but at the end of the day if it does go to court you are unlikely not to receive a refund. The bank has to prove that the charges were not penalties. At any of these stages before a court hearing there may be an offer which you may need to negotiate.

If you really don’t want to get your hands dirty with this, or simply don’t have the time then there are companies out there that will do this for you at a no win no fee commission. This commission is usually 25% of the won claim value. The fee also includes court costs. However, in most cases these claims do not go to court so that level of fee has to be considered carefully.

Shop around and you will find the odd company that does offer a simple low fixed fee on a no win no fee basis. The benefits are you only pay for the stage at which you win your claim, and as the company does not automatically factor in court costs it may take more care to maintain the relationship between you and your bank in order not to get to that stage.

Whatever choice you make do it soon as the OFT (Office of Fair Trading) are rumoured to be soon setting an acceptable level of charges for the banks. If that is the case the banks are extremely likely to limit payouts that are in excess of the new set charge. So if £12 is the ruling then it will have a massive impact on claims.