No Win No Fee Claims Used On Banks

Various ‘no-win-no-fee’ companies exist offering their services to help customers reclaim unfair bank charges. They can charge as much as 30% commission for successful claims, taking a more than justified cut of your money.

Under the Unfair Terms in Consumer Contracts Regulations Act (1999), all penalty charges introduced by banks have to truly reflect the cost of administering them. This can also be understood as: banks cannot make a profit from customers who incur a penalty charge. However while a decision on the OFT case will no doubt go all the way to the House of Lords, that does not mean you shouldn't try and get your money back. Before 2009, when a decision is expected, you ought to remember that you can only claim back six years of unfair penalty charges. This means the longer you wait the less money you can claim back.

The popular trick of ‘partial offers’ is often played by ‘no-win-no-fee’ companies. A partial offer is exactly what it says it is – a partial offer. So for example, if you are claiming for £1,000 in unfair charges, your bank may offer to pay out £600 in compensation. Before you accept any such offers you may receive, make sure you fully consider whether you want to pursue your claim to the bitter end and get full compensation, or settle for a partial offer.

The majority of banks will not want to go to court. The costs involved for taking every claimant to court far outweigh the cost of paying out compensation. What’s more, the publicity any court case would generate is likely to cause severe damage to a bank’s reputation and will do nothing for customer confidence. Also, a court case would bring the banks’ banking practises – including their profits and actual costs – under considerable scrutiny. Banks do not want their methods revealed. Therefore, court is not an option welcomed by banks.

Another thing to keep in mind when claiming back money from banks is that many have been known to close accounts after paying out compensation. It is therefore a good idea, to open a new current account before taking them to court. If you have an existing overdraft facility, it should not be too much of a problem to get a new agreement with another bank. Remember: banks hate nothing more than losing customers and the majority will bend over backwards to get new customers.

Once you have your full bank statements from your bank go through them all and work out a total figure for the charges you have incurred. Make a note of how much you were charged and when – it may be useful for future correspondence with your bank. Add up your total and remember to be exact to the penny – you are dealing with the law and financial institutions so precision is everything to avoid delay and make a successful claim.

Armed with your total figure of unfair charges you should write to your bank saying that you think the charges are unfair and ask for compensation. If you do not receive a response from the bank after 14 days or so, send another letter, outlining the same concerns as you expressed in the first letter, but this time threatening court action if you do not receive a response. If you still do not receive a response to your request from you bank then file for a court judgement. No bank has yet to go to court over this issue. As mentioned above, banks are very unwilling to go to court so this should not be an issue but it is good to be prepared.

Sofia is an author of several articles pertaining to No Win No Fee, Compensation Claims, Personal Injury Claims and other legal articles.