Bank charges update: All is not lostSupreme Court ruling is a blow, but no knock-out

26 November 2009


You can incur a penalty for HMRC mistakes

Some consumers who are suffering hardship and pursuing claims for bank charges may still have a chance of claiming them back, in spite of Wednesday's crucial Supreme Court judgment which ruled in favour of the banks.

The Supreme Court said the Office of Fair Trading was not entitled to assess the banks' charges for fairness under the Unfair Terms in Consumer Contract Regulations. However, Which? has discovered that some consumers may be able to pursue their claims against banks that have charged them for unauthorised overdrafts. 

Reclaim bank charges

Any consumers who believe they may be entitled to reclaim bank charges should:

  • Not go to claims handlers. They will not be able to help you get your money back and you could be obliged to pay a hefty administration fee. 
  • Remember that Wednesday's court decision is unlikely to draw a line under the bank charges issue. The Office of Fair Trading (which brought the action against the banks) has still to announce whether it intends to pursue other avenues in response to the ruling. 
  • If you are in financial hardship there is action you can take now. Contact your bank. While they may not refund your existing bank charges, you are protected by the Lending Code, which ensures that special arrangements are made for people in financial difficulty. If your bank will not consider your claim fairly, you can take the matter to the Financial Ombudsman Service.
  • Look at your banking arrangements. Different banks charge different amounts for using authorised and unauthorised overdrafts. You may be better off switching to another bank. Be aware that it may be difficult to switch accounts if you are overdrawn. To find a new account, visit our current account tables.
  • If your complaint stems from an administrative error on the part of the bank, rather than the amount you were charged for going overdrawn, you should pursue your claim with the bank.

Unauthorised bank charges

Which? chief executive Peter Vicary-Smith said: 'The outlook is bleak for anyone with an outstanding claim and we’re concerned that yesterday’s ruling could drive people into the arms of unscrupulous claims handlers. Beware of companies who contact you promising to get your bank charges back and never pay an upfront fee.

'If you’re in financial hardship, tell your bank. They’re unlikely to give you your money back, but they have to take your circumstances into account and may waive any future charges. If your bank refuses to help you, then go to the Ombudsman.

Which? would be interested in hearing from anyone who receives a letter from their bank explaining how their bank intends to proceed in light of the Supreme Court decision. Please let us know of any developments by emailing

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