In the wake of a huge public revolt against unfair charges, Britain’s banks are facing a potential payback of £50 million, according to moneysavingexpert.com.
The fees were enforced as a result of customers stepping outside the terms and conditions of their agreements with their bank, such as exceeding overdrafts or bouncing cheques, but these charges were deemed unlawful by the Office of Fair Trading last year because they exceeded the costs incurred by the banks as a result of the customers’ actions.
People are now claiming back up to £1,500 each, which they have lost over the past 6 years, with banks receiving ten thousand forms each day.
More than one million forms have been downloaded in the last 3 months alone from moneysavingexpert, a popular website which provides information about financial services.
The site's creator, Martin Lewis, said that cases already settled or lodged with the banks would result in a predicted total payout of £50m, as settlements often top £1,000.
Given the success of the campaign, the £50m figure – which the British Bankers Association did not dispute – could rise higher still. The website calculated that if the current rate of growth continued, four million forms will have been submitted by the end of the year.
The bank charges revolt began when several unsatisfied customers challenged their banks and successfully got their money back which had been claimed for unauthorized lending on their accounts.
It is not so much the charge that has been found unlawful, as the amount: the administrative cost of dealing with each unauthorized spend is said to be no more than £4.50, whereas banks often charge up to £40 for the privilege.
Learn more about reclaiming bank charges