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How to Write an Effective Letter to Reclaim Unfair Bank Charges

By: Jeff Durham - Updated: 1 Aug 2013 | comments*Discuss
Letter To Bank Reclaiming Unfair Bank

Up until a couple of years ago, if you’d been stung by bank charges for things like exceeding an overdraft limited, having direct debits which have been rejected due to insufficient funds in your account or writing a cheque that’s bounced, you’d have been more likely to try and plead your case (or excuse) over the phone and hope for a sympathetic ear.

However, whilst your bank may have decided to ‘let you off’ once, they were under no obligation to do so and the next time it occurred you may have been hit by something like a £30 charge which you’d have to grin and bear. However, over the past couple of years and following the advice of a number of consumer interest groups, many people have literally claimed back hundreds, if not thousands, of pounds of unfair bank charges.

They’ve been able to do this in the light of the advice offered by the consumer groups by writing to the banks and asking them to justify the cost of a particular charge and where the banks have not been able (or have been unwilling) to do that, they’ve ultimately been left with no option but to reverse these charges, sometimes including any interest that has accrued as a result.

When to Write the Letter

If you feel you’ve been unfairly treated with regards to unfair bank charges and wish to reclaim then, you need to do so in writing and it’s important to start taking action now as the banks are fighting back. At present, in April 2008, we are still awaiting the outcome of a test case which took place in February 2008 and which has resulted in ongoing legal discussions between the banks and the Office of Fair Trading.

Until this test case has been resolved, many of the banks are now sending you a letter in return following your complaint about unfair bank charges stating that whilst they acknowledge your complaint, the FSA - the Financial Regulator - has given them permission to suspend all bank charge complaints until the outcome of the test case has been resolved. However, this should not deter you and here are two examples of letters you could write tailoring them to suit your own specific circumstances.

Letter 1 should form the basis of your initial complaint whilst letter 2 should be sent as a follow up, if you’re experiencing financial hardship as a result of the charges imposed. Don’t forget to include your account number on both letters.

How to Write the Letters

Letter 1

Dear Sir or Madam,

I would like to request that you repay all of the charges that have been applied to my account over the past 9 months in relation to exceeding my overdraft limit. I am requesting this as I do not feel that the charges that you have administered upon my account in any way reflect the true cost to the bank of my account exceeding its overdraft limit.

The charges total £270 and I believe that I have been unlawfully deprived of this money which I am rightfully entitled to. Therefore, I am asking you to repay me the full amount and have highlighted all of these charges on the attached copies of my bank statements.

I look forward to hearing from you.

Yours faithfully,

The chances are that you’ll receive a letter pointing to the awaited outcome of the test case and that all complaints relating to charges will be dealt with then. If so, you can send Letter 2 which could read as follows:

Letter 2

Dear (name on the letter sent to you)

Thank you for your response to my recent letter regarding my issue about reclaiming bank charges which I deem to be unfair and disproportionate to the cost of administering them.

Please could you deal with my case now as opposed to awaiting the outcome of the test case as I am currently suffering extreme financial hardship due to losing my job back in March. (or whatever your reason might be - e.g. marital breakdown, disability, starting a lower paid job etc.)

I am fully aware of the advice which the FSA has given to banks with regards to these matters until there has been an outcome as the result of the recent test case. However, I am also aware that the FSA has also issued a waiver which has stated that, as a bank, you are still morally obliged to deal with these matters in cases of financial hardship.

I look forward to hearing from you again within 14 days.

Yours sincerely (if you know their name now, if not use “Yours faithfully”)

This article is, of course, quite specific and relates to the current situation as of April 2008. However, it may be necessary to revise this in the future as the result of the outcome to the test case which is expected later in 2008.

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