The trouble with claiming back bank charges
Updated on 09 November 2009
Claiming back overdraft fees from banks is not as easy as it seems, as Channel 4 News has discovered. Have you had bank charge trouble? Email us at news@channel4.com.
Customers hoping to claim unfair overdraft fees and other bank charges are being frustrated by bank's inability to reveal bank information, a survey by Channel 4 News can reveal.
Banks have made an estimated £2bn a year by charging customers hefty fees for unauthorised overdrafts, bounced cheques and direct debits, and suchlike.
These fees are often in excess of £30, even though the banks have conceded that the actual cost of processing such a claim is a small fraction of that figure. Many people have run up thousands of pounds of such fees, seriously exacerbating other ongoing debt problems.
A major legal challenge, currently with the supreme court, is examining whether these are legally "fair". If the supreme court justices rule against the banks, it could open the door for billions of pounds worth of charges to be paid back.
This test case covers the period from 2001 to the present – but the relevant rules, called the Unfair Terms in Consumer Contracts Regulations, were in effect from 1995. So campaigners believe that a defeat from the banks could open the door to claims dating back to 1995.
However, those claims would be difficult to make without access to bank statements or summaries of charges paid.
Banking data
Legally, banks are not obliged to keep data prior to 2001. But of eight major banks surveyed by Channel 4 News, only one, HSBC, stated categorically that they do not keep any statement data before 2001.
Nationwide said that statements were available dating back to the 1980s. The others said that they may have data dating back earlier than that – but none would give Channel 4 News access to their data retention policies, or give specific answers about exactly what they kept.
Marc Gander, a former lecturer in law and a campaigner on the bank charges issue, said: "Unfortunately most people who are in the bank charges situation are often people who will have destroyed their account history, they won't have opened envelopes, or they will have destroyed their statements, and they need to get this information back from the banks before they can really get started. And I think that people who want to claim back to 1995 may well have a tough job getting the information they need."
Some banks actually seem to be misleading their customers about what information is available. For example, Peter Smith, a computer expert from Middlesbrough, contacted Barclaycard to request information dating prior to 2001. He was sent statements dating from 2003 and told nothing else was available.
He took the case to court - and Barclaycard revealed that further statements were actually available on microfiche filing systems, but the bank claimed that these were not covered by the data protection act.
Barclaycard told Channel 4 News that, "it is a requirement of us to keep data for six years and in some circumstances we are required to keep it longer for legal and regulatory purposes and as such no statement information is kept on microfiche or otherwise prior to January 2001."
They added that, "as matter of goodwill we always provide [microfiche] data to our customers when asked."
Have you had problems claiming money back from your bank? Are you trying to claim from after 2001? Contact Channel 4 News at news@channel4.com.
