The reason you can reclaim is simple; it’s because bank charges are unlawful. Of course, the banks don’t agree, which is why there’s currently a High Court case deciding once and for all. Yet this guide isn’t about making a political point; it’s a practical guide to getting your money back.
The law behind thisThe core argument is that banks should only impose charges which are in proportion to their costs. This is because under ‘breach of contract’ laws, the charge should not exceed the cost of the breach.
Yet go beyond your overdraft limit or have a cheque or direct debit payment bounce and the banks charge a penalty of up to £39 a time – even if you’re only £1 over the limit. Yet all it has to do is send a computer-generated automatic letter with a franked stamp. A report by a Professor of Banking estimated this costed only between £2.50 and £4.50. And this was being generous.Plus a second element of law says if the bank is ‘fining you’ for going over the limit, and this fine is too high, then under the law of penalties this is ‘extravagant’.
All in all, it means bank charges are unlawful, so as the banks had no right to grab your cash, but still did it, you’re entitled to get it back. The banks’ primary argument against it is that ‘unfair contract’ terms don’t apply to bank charges, and that’s exactly what the test case is deciding.Isn’t it in the terms and conditions though?
Of course, if you had read the terms & conditions when you got your back account, this was in there. Yet that’s irrelevant: a contract must be written within the law, and they can’t enforce a contract with legally unfair terms. Ultimately, if it isn't proportionate then it's unlawful, and thus you've a right to your money back. Let me use my favourite analogy for this:
If someone told you they were about to punch you before smacking you; it doesn’t make it legal. The same’s true with bank charges. No one’s saying there shouldn’t be bank charges, just that they are set massively too high; a few pounds would be more appropriate.
The law behind thisThe core argument is that banks should only impose charges which are in proportion to their costs. This is because under ‘breach of contract’ laws, the charge should not exceed the cost of the breach.
Yet go beyond your overdraft limit or have a cheque or direct debit payment bounce and the banks charge a penalty of up to £39 a time – even if you’re only £1 over the limit. Yet all it has to do is send a computer-generated automatic letter with a franked stamp. A report by a Professor of Banking estimated this costed only between £2.50 and £4.50. And this was being generous.Plus a second element of law says if the bank is ‘fining you’ for going over the limit, and this fine is too high, then under the law of penalties this is ‘extravagant’.
All in all, it means bank charges are unlawful, so as the banks had no right to grab your cash, but still did it, you’re entitled to get it back. The banks’ primary argument against it is that ‘unfair contract’ terms don’t apply to bank charges, and that’s exactly what the test case is deciding.Isn’t it in the terms and conditions though?
Of course, if you had read the terms & conditions when you got your back account, this was in there. Yet that’s irrelevant: a contract must be written within the law, and they can’t enforce a contract with legally unfair terms. Ultimately, if it isn't proportionate then it's unlawful, and thus you've a right to your money back. Let me use my favourite analogy for this:
If someone told you they were about to punch you before smacking you; it doesn’t make it legal. The same’s true with bank charges. No one’s saying there shouldn’t be bank charges, just that they are set massively too high; a few pounds would be more appropriate.
0 Comments:
Post a Comment