Despite the continued legal wrangle about unfair overdraft charges between the banks and the OFT, if you are one of the thousands of customers who has suffered at the hands of their bank when it comes to overdrafts and charges in the last six years act now to start the process of getting your money back. Download the letter and follow our step-by-step guide.

Update: The Financial Ombudsman Service (FOS) has frozen any outstanding claims it was dealing with regarding bank charges and the Financial Services Authority (FSA) has given banks the option to freeze any unresolved claims until a decision is reached at the High Court. The test case took place on 14th January 2008 and the announcement was made in April, and found in favour of the OFT. The next hearing will take place on 22nd May. Read More: Banks Lose Over Unfair Bank Charges.

Under the Unfair Terms in Consumer Contracts Regulations Act (1999) all penalty charges introduced by banks have to truly reflect the cost of administering them. What this means is that banks cannot make a profit from customers who incur a penalty charge. But, while a decision on the OFT case will no doubt go all the way to the House of Lords - expect a decision in 2009 - that doesn't mean you shouldn't try and get your money back. Remember, you can only claim back 6 years of unfair penalty charges so the longer you wait the less money you can claim back.

Unfair Bank Charges Court Hearing Q&A: Confused by the latest news on unfair bank overdraft penalties? Get the answers you are looking for and find out what the Office of Fair Trading High Court hearing really means for the future of banking in Britain.

Claim Back Unfair Overdraft Charges from your Bank

Follow our tips and advice to get back your money back now. By writing to your bank now you will be in the queue for when a decision is finally announced and able to claim back your unfair bank charges sooner rather than later.

So, as we’ve all known for years, there is no-way a bank can claim that it costs them £30 to send out a letter when a customer goes into an unauthorised overdraft by just a few pounds.

Customers in England, Wales and Northern Ireland are entitled to claim back any unfair charges they may have paid in the last six years, while customers in Scotland, operating under slightly different Scottish laws, can claim back charges for the last five years.

If you have paid any charges that you thought were unfair, follow our step-by-step plan below to claim your money back – it’s yours, not the banks’ after all.

Claiming Back

Check your Statements – Not many of us keep bank statements going back over the last six years but under the Data Protection Act you are entitled to ask your bank for this information. Write to or visit your local branch to ask for your statements. Most banks keep statements for online accounts for the last 6 months, so if you bank online, look here too. (Tools: Online Banking Links).

Open a New Account – Before embarking on any attempt to claim back unfair bank charges it may be wise to open a new current account first: some banks have been known to close accounts after paying out compensation. If you have an existing overdraft facility, it should not be too much of a problem to get a new agreement with another bank. Remember: banks hate nothing more than losing customers and the majority will bend over backwards to get new customers.

Your Charges – Once you have your full bank statements from your bank go through them all and work out a total figure for the charges you have incurred. Make a note of how much you were charged and when – it may be useful for future correspondence with your bank. Add up your total and remember to be exact to the penny – you are dealing with the law and financial institutions so precision is everything to avoid delay and make a successful claim.

Write to Your Bank – This is the important bit – and where we can help. Armed with your total figure of unfair charges you should write to your bank saying that you think the charges are unfair and ask for compensation.

Threaten Further Action – If you do not receive a response from the bank after 14 days or so, send another letter, outlining the same concerns as you expressed in the first letter, but this time threatening court action if you do not receive a response.

Go to Court – If you still do not receive a response to your request from you bank then file for a court judgement. No bank has yet to go to court over this issue. Visit the website www.moneyclaim.gov.uk and follow their step-by-step points on how to register.

After filling in your request there is then a 14 day period when the bank will have to acknowledge your claim, setting in motion the legal process. Often, banks do not even acknowledge a request, which means that you can then put in a direct claim to the court asking for compensation for the full amount. Note: It is doubtful that banks will want to take you to court on this issue, but it should never be ruled out completely.

Things to Be Aware of…

Companies - as ever there are numerous ‘no-win-no-fee’ companies out there offering their services to help customers reclaim unfair bank charges. Don’t use them – they can charge as much as 30% commission for successful claims, swallowing up your well earned claims! Use our step-by-step points as listed above and our exclusive bank letter template to save yourself some money.

Partial Offers – A popular trick often employed in these David and Goliath situations. A partial offer is exactly what it says it is – a partial offer. So if you are claiming for £1,000 in unfair charges, your bank may offer to pay out £600 in compensation. Think long and hard about any offer you receive and decide whether you want to pursue your claim to the bitter end and get full compensation, or settle for a partial offer.

If you go to Court - The majority of banks will not want to go to court. The costs involved for taking every claimant to court far outweigh the cost of paying out compensation. Plus, the publicity any court case would generate is likely to cause severe damage to a bank’s reputation and will do nothing for customer confidence. And, finally, a court case would bring the banks’ banking practises – including their profits and actual costs – under considerable scrutiny! Banks do not want their methods revealed. All things considered then: bad news for banks.

Get the Letter: Download the letter to start claiming back your money now, Click Here.

Have you received a pay-out from the banks over unfair overdraft charges? Do you think the banks are right to charge for going overdrawn? Will this mean the end of free banking? Share your views with us using the Comment on this Article box below.