Reclaiming your bank fees is easy if you follow four steps.

Some no-win, no-fee companies have started charging to represent people but there are several voluntary organisations offering free advice.

Consumer watchdog Which? and the Consumer Action Group have written a step-by-step guide, including template letters, to help you recover your losses.

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Step one

By law you can make a claim for charges paid on unauthorised overdrafts in the last six years.

You will need to write to your bank and ask them to provide bank statements for this time.

Under the Data Protection Act 1998, the company must provide this information within 40 days and they cannot charge more than £10.

The company may try to charge you more for providing copy statements but if you request a computer printout of charges, which are acceptable evidence in the small claims court, they cannot charge more than £10.

Do not be put off by an attempt by a company to prevent you getting your information. If you experience problems, contact the Information Commissioner.

Letter One asks your bank to send you a list of all the default charges on unauthorised overdrafts and unpaid direct debits applied to your account in the last six years. You only need to send this if you want your money back and have not kept bank statements.

Insert your personal information where indicated.

To view letter one, click here

Step two

When you know how much you have been charged, write to your bank telling them you are unhappy with the charges you have paid. Allow the bank a reasonable amount of time to respond. It may agree to pay back all or some of your money.

Letter Two asks your current account provider or credit card company for a refund.

Insert your personal information where indicated.

To view letter two, click here

Step three

If your demand for a refund in Letter Two was rejected or you did not receive a response, write a letter of appeal.

Letter Three informs the bank you will be taking court action if it is not resolved and includes a strict time limit you give the bank to respond.

Insert your personal details where indicated.

To view letter three, click here

Step four

If Step Three does not work it is time to go through the court process.

Most claims are settled before going to court. Small claims in England are cases under £5,000, before any statutory interest is added.

To begin there is a simple online form to fill out on the small claims court website at www.moneyclaim.gov.uk See the template below and insert your details where indicated.

There is a fee of between £30 and £120, depending on the size of your claim, which can be paid by credit or debit card. It is refunded if you win. The paperwork to start the claim is also available from your local county court.

What happens next?

When the small claims court receives your form it will write to the bank and tell them they must respond within 21 days. The bank might respond in one of four ways:

1. The bank might ignore your claim and not respond in 21 days. You should ask the court to decide what happens next. If the court decides the bank should pay up, the bank must do so within one month.

2. The bank might agree to pay back all your money in full, including the court fee.

3. The bank might “admit the claim in part” and offer some of your money back. You can choose to accept the offer or turn it down.

4. The bank might argue against paying your money back. The court will send you a form to fill in and a hearing will be set where you meet with a judge and someone from the bank.

Particulars of claim

Between the dates of insert dates of first and last charge the Defendant applied numerous default charges to the Claimant's bank account.

2. The charges applied constitute an unfair penalty under the Unfair Terms in Consumer Contracts Regulations, which state: "A term is unfair if it requires any consumer who fails his obligation to pay a disproportionately high sum in compensation." The amount charged does not reflect the cost of the breach.

3. Under the law of penalties, the charges are an unlawful "extravagant" penalty. Referring to the case of 1896, Wilson v Love, a charge is a penalty if it does not reflect an item's true cost.

4. Under the County Courts Act 1984, the claimant is entitled to interest at a rate of eight per cent per annum from the date they were first deprived of the money to the date of this claim. This amounts to a total sum of insert amount of interest, continuing to accrue at the statutory daily rate of 0.021 per cent until judgment or earlier payment.

5. The Claimant therefore asks the court to enter judgment in their favour for the sum of insert total charges plus interest, amounting to a total of insert total charges plus interest.

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Letter One

[your address]
[their address]
[date]

Data Protection Act 1998 Subject Access Request

Dear Sir/Madam

ACCOUNT NUMBER: xxxxxxxxx

Please supply me with a complete list of transactions and charges relating to my banking history with your organisation. Alternatively, a complete set of statements for that period will be acceptable.

Additionally, where there has been any event in my account history over this period which has required manual intervention by any member of your staff or any other person, I require disclosure of any indication or notes which have either caused or resulted in that manual intervention or other evidence of that manual intervention in relation to my banking business with you.

If you are unable to supply this data because there has been no such manual intervention, then please be so kind as to confirm this in your response.

I enclose the statutory maximum fee of £10. You have 40 days in which to comply. Furthermore, if I discover that you have levied disproportionate penalties against me, then I shall be reclaiming them, and also reclaiming the enclosed £10 Data Protection Act subject access request fee.

If there is specific information which you require in order to satisfy yourself as to my identity, please let me know by return. However, please note that the above address is the one which you normally use to communicate my private business to me and which you have hitherto found to be acceptable.

I would be happy to collect the data from my local branch.

Yours faithfully,

[signature]

[name]

Letter Two

[your address]
[their address]
[date]

Dear Sir/Madam

Penalty & unfair charges – request for refund for [your name]

(Sort code:                Account no:               )

According to my records I have been charged £[amount] in paid referral fees and £[amount] in charges for items returned unpaid since [date].

0n April 5, 2006, the Office of Fair Trading (OFT) announced that default charges which are set at more than £12 will be presumed to be unfair and unenforceable in terms of the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). Charges above this sum will be subject to legal action by the OFT (press release 68/06 – online here: http://www.oft.gov.uk/News/Press+releases/2006/68-06.htm

The OFT stated that a charge is not fair simply because it is below this sum and I believe that a reasonable charge would be 50 pence for the reasons set out below. Please refund my charges as a matter of urgency.

I would respectfully submit that if your organisation does not agree to immediately refund all unfair charges applied to my account, it will not meet the “fit and proper person” test to hold a consumer credit licence under the Consumer Credit Act 1974. In that eventuality, I will submit a 1974 Act complaint to the OFT.

Separately, I am of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co. Ltd. (1904) 12 SLT 498, the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79.

Your charges do not reflect any actual loss, instead they appear to represent a lucrative profit-making scheme. In particular, charges were applied after I entered into a transaction(s) without sufficient funds in my account. However, payment was declined by you and therefore, actual loss is the cost of automatically sending me a computer-generated letter. I would respectfully submit that is valued at no more than 50 pence.

UK banks have recently given evidence to the House of Commons Treasury Committee on how bank charges are calculated: “The costs are going to pay for all the people we have who pursue debt, collect debt, speak to customers and chase payments. The way these charges are arrived at is by taking these total costs and making some assumptions about the volume that is going to come through to arrive at the individual charges.” (second report, 25 January, 2005, paragraph 50 – online here: http://www.parliament.the-stationery-office.co.uk/pa/cm200405/cmselect/cmtreasy/274/27405.htm

Accordingly, the charges applied to my account are not a reasonable pre-estimate of the bank’s loss in relation to my account. No one has had to look at my account or telephone me. No one has had to collect anything. Your charges would appear to represent a device to recover global losses (for example, loan defaulters, bad debt write-off, including commercial lending in, and outwith, the UK).

Please refund all charges applied to my account from the start of 2001 within the next seven days. I reserve the right to commence court proceedings without any further notice and to seek an additional award for distress and inconvenience, together with legal expenses.

Yours faithfully

[signature]

[your name]

Letter Three

[your address]

[their address]

[date]

Dear Sir/Madam,

Re. Account number: [your account number] I refer to default charges applied to my account amounting to [insert total of charges plus interest], which I have requested you pay back.

I wrote to you on [insert date], making the original request for a payment in settlement of my claim. As I have not heard from you/not received a satisfactory response [delete as appropriate], I am writing to inform you I intend to claim the full amount claimed together with interest up to the date of judgment and court fees in the proceedings through the county court.

This is based on the Unfair Terms in Consumer Contracts Regulations, as I believe these default charges are unfair and not proportionate to your costs, and therefore the [insert name of court] court will rule in my favour.

I have attached a full schedule of the charges and interest with this document. [include printout of the charges sent to you in Step One and keep a copy for yourself]

I look forward for a full response to this letter within seven days, otherwise I will commence court proceedings to reclaim my money.

Yours faithfully,

[signature]

[name]

For further advice and information visit the following,
www.which.co.uk
www.consumeractiongroup.co.uk
www.financial-ombudsman.org.uk
www.moneysavingexpert.com