Extortionate charges'ASBO' for banks over rip-off overdraft charges

01 April 2006

Which? is issuing all banks and building societies with an ASBO - an Anti-Social Banking Order - for raking in billions in unauthorised overdraft charges.

We have also launched a campaign to help consumers win their money back and asked the Financial Services Authority (FSA) to investigate whether banks are acting unfairly.

Doug Taylor, Personal Finance Campaigner at Which?, said: 'These charges are nothing but an easy money-spinner for the banks. In 2004 we found that consumers paid a whopping GBP 3 billion in charges for going into unauthorised overdraft.

'We think charges should be fair and reflect the costs involved. They should not be, as they are now, an arbitrary figure picked to make the most money out of unsuspecting customers. So, we are calling on banks to come clean about their charging structures and open their books to scrutiny.'

Challenge the banks

Which? has produced a complete set of web resources to help consumers win their money back. Our banking charges site includes:

  • Information on why the charges may be unenforceable in law
  • A factsheet on how to use the small claims court to gain redress
  • Template letters to challenge the banks

Doug Taylor added: 'Banks and building societies have been hiding behind unacceptable excuses for too long. It simply cannot cost up to GBP 35 to send a letter so we have today written to the Financial Services Authority, asking them to investigate whether the banking sector is acting unfairly.'

If you are going to challenge bank charges, remember that you can take your bank to the small claims court for any overdraft charges they have made in the last six years.

If you have not kept statements you will need to request details of these charges from your bank. We have produced a letter which you can download from our banking charges site and send to your bank.

Big companies like banks might test your staying power by ignoring your letters or taking as long as they can to respond to your small claims court claim, so be persistent.

Your bank may also attempt to put you off by threatening you with huge court costs (for their barristers, for example). However, if your claim is reasonable, it is highly unlikely that you will be charged so don't be put off.