Free money?

Reclaiming unfair bank charges has become big business in recent years in the UK and a major headache for the banks. Many people feel that the charges levied by banks for exceeding an overdraft limit, sending a letter or just giving you the time of day are unfair, unjustifiable and possibly even illegal. Especially given the profits that banks make.

Somewhere along the line, some bright spark figured out that by writing a few letters it's possible to get these charges refunded. He told his mate, who told a couple of people down the pub and before you know it everyone was at it. The banks got upset and now there's a test case to figure out once and for all whether they have to pay them back or not.

So what does this all mean? Well for the time being no more claims can be brought, whilst the test case is going on. Some people think it's a bad thing for people to be reclaiming these charges as the banks will simply start charging for something else in order to recoup the lost profits (no, not the Lost Prophets).

However, in August 2007 when HSBC tried to start charging students for their overdrafts once they'd graduated a Facebook group (login required) was started and the response and bad press were so overwhelming that they changed their plans. On top of that, competition is fierce among the high street banks and you only need one bank to offer customers a better deal (eg Nationwide not charging for money taken out when you're abroad) and they have a competitive edge that should attract customers.

Do it yourself

Anyway, none of this is helping you get more money... You can either do the legwork yourself, here's one of many sites that will show you how to do it, free of charge or, you can get a company to do it for you (read this about things to check for) for a fee. The fees vary, some want money up front, others operate a no win, no fee scheme but will make you sign an agreement that states if you get bored and give up halfway through they can charge you for the work they've already done.

Get someone else to do it for you

Cash Ninja is using Gladstone Brookes. They are operating on a no win no fee basis. If they succeed then they're going to take 25% plus VAT as their fee. Yes it's a lot of money but we wanted to test the process out for you guys to see whether it really is worth oaying someone to do it.

No win no fee

Here's the thing with these companies, they operate on a no win no fee basis. On the face of it that sounds like a good thing because if they don't succeed then you don't have to pay them. However, what it means is that they will only pursue the easiest cases that are likely to make them a large amount for little effort. If you don't fit into that category, they won't pursue it for you and if you do fall into that category then why bother getting them to do it for you? If you have a large claim then it's worth pursuing yourself for the extra cash. If you're owed £1000 you could end up paying £300 of that to one of these companies.

Ok, here's an update. We gave up on the bank charges idea. The reason being that no bank charges are currently being refunded based on a rent High Court ruling. The Financial Ombudsman may appeal against the decision but until that situation has been resolved then there is little point in attempting to get these charges refunded.

Payment Protection Insurance

Although you can't do anything about bank charges at the moment, if you have taken a loan out, with payment protection insurance then there's a chance you were mis-sold and can claim a refund. Here's how to go about it. This isn't being effected by the bank charges test case so there's no reason not to go ahead and do it. Cash Ninja has the same company acting to reclaim some and progress updates will be provided right here. So far, after about 8 months, there is very little progress to report... The claim has been passed to the Financial Services Ombudsman and they are reviewing it.

Success!

The financial ombudsman has ruled that the company has to repay the PPI plus 8% interest. At present we are waiting to find out how much the payment will be and have been advised it could be another 6-8 weeks before a cheque arrives. Although the process has taken a long time we are finally going to get paid!

Payment at last

The cheque has finally arrived. At total refund of around £1700 was received, inlcuding the 8% interest. Of this around £500 has to be paid out to Gladstone Brookes for their work. Still, that leaves £1200 that we wouldn't have got back otherwise.