Customers rewarded in the fight against unfair bank charges

31 August 2007
According to a poll from market research agency YouGov, claims against unfair bank charges are beginning to pay off. The survey revealed that almost a third of customers has faced charges since 2001, and 5 per cent has paid more than £2,500 in fees.

Fees can be levied if customers exceed an agreed overdraft limit, if a cheque bounces, or if there are insufficient funds in an account to cover direct debits.

Research shows that the average refund was £685, and that the 3.8 million current account customers affected have reportedly claimed back approximately £2.6 billion in charges.

Lloyds TSB has been named as one of the banks charging the most, while Abbey National has been referred to as the most prolific charger.

The first major claim against unfair charges was made in 2006 and was settled in an out-of-court settlement by Abbey National. Since then, increasing numbers of customers have been fighting back and some have won claims amounting in the tens of thousand pounds range.

Helen Ainsworth, a representative of Which?, said: "The reason this campaign has struck such a chord with people is that they feel these charges are disproportionate and unfair considering the cost to the bank."

Which?’s has “slapped an ASBO - that's an Anti-Social Banking Order - on current account providers for the way they are treating their customers.”

Estimates show that banks are gleaning annual revenue of between £1.2 billion and £4.7 billion a year from bank fees and the Office of Fair Trading has deemed this disproportionate as costs they incur are rarely higher than £2 to £4 each time.

Customers are at liberty to claim back fees relating to current accounts, credit card charges for late payments and mortgage exit fees – either independently or through an intermediary company.

Find out more about reclaiming bank charges