It could soon be a case of laughing all the way from the bank instead of to it, leaving the management inside to sob bitter tears over diminished profits.
Last month's ruling by the Office of Fair Trading (OFT) that many bank penalty charges of more than £12 are unfair could generate a flood of compensation claims.
These penalty charges are those enforced for late payments on credit cards, unauthorised overdrafts, unpaid direct debits and standing orders and missed payment fees on store cards and mortgages.
The ruling, which extends back six years, is seen by lawyers and consumer groups as a green light for customers seeking redress for hefty charges and penalties over that period.
Many believe that the OFT ruling will significantly improve your chances of a successful outcome in a small claims court action.
Keeping penalty charges below £12 is not going to make for happy bank managers. For instance, the big four banks (Halifax, NatWest, TSB, Barclays) all levy a charge of £30 if you exceed your authorised overdraft limit without permission.
It has been estimated that some £3 billion a year of bank profit stems from such charges.
Research indicates that 36% of the adult banking population have been overdrawn without authorisation at some time, and the average cost of penalty charges each time amounts to £70.
Consumer group Which? maintains such charges are illegal under the Unfair Terms in Consumer Contracts Regulations and has set up a website to help consumers retrieve money lost in this way.
And there have been successful consumer actions; for example a student, earlier this year scored a major victory by securing a £5,000 settlement from Abbey after arguing his case under the regulations.
How to get your bank penalty charges back
The first step is to write to your bank asking for your money back (you might even consider adding a £35 admin fee).
Under the Data Protection Act, your bank is obliged to supply a list of all charges you have paid in the past six years. You may get a refund without too much quibbling.
If you don't, then, as step two, a stronger letter is required, warning of court action or threatening to refer your case to the Financial Ombudsman Service (FOS).
Which option you take will be determined by personal circumstances. If it is the latter course of action, once you complain to the FOS, your bank has eight weeks in which to resolve the dispute or incur a £360 fine.
This fact alone may lead your bank to settle your claim. At present, there are no published FOS decisions relating to bank charge cases, so it is difficult to ascertain its view on such a situation, although it will undoubtedly evaluate the administrative burden the bank has incurred.
An FOS application must be made within six months of your bank's final rejection of your friendly overtures about returning unfair charges.
A form must be filled in; help in doing this can be obtained by calling the FOS helpline on 0845 080 1800.
Sent my letter off on Friday.
Last month's ruling by the Office of Fair Trading (OFT) that many bank penalty charges of more than £12 are unfair could generate a flood of compensation claims.
These penalty charges are those enforced for late payments on credit cards, unauthorised overdrafts, unpaid direct debits and standing orders and missed payment fees on store cards and mortgages.
The ruling, which extends back six years, is seen by lawyers and consumer groups as a green light for customers seeking redress for hefty charges and penalties over that period.
Many believe that the OFT ruling will significantly improve your chances of a successful outcome in a small claims court action.
Keeping penalty charges below £12 is not going to make for happy bank managers. For instance, the big four banks (Halifax, NatWest, TSB, Barclays) all levy a charge of £30 if you exceed your authorised overdraft limit without permission.
It has been estimated that some £3 billion a year of bank profit stems from such charges.
Research indicates that 36% of the adult banking population have been overdrawn without authorisation at some time, and the average cost of penalty charges each time amounts to £70.
Consumer group Which? maintains such charges are illegal under the Unfair Terms in Consumer Contracts Regulations and has set up a website to help consumers retrieve money lost in this way.
And there have been successful consumer actions; for example a student, earlier this year scored a major victory by securing a £5,000 settlement from Abbey after arguing his case under the regulations.
How to get your bank penalty charges back
The first step is to write to your bank asking for your money back (you might even consider adding a £35 admin fee).
Under the Data Protection Act, your bank is obliged to supply a list of all charges you have paid in the past six years. You may get a refund without too much quibbling.
If you don't, then, as step two, a stronger letter is required, warning of court action or threatening to refer your case to the Financial Ombudsman Service (FOS).
Which option you take will be determined by personal circumstances. If it is the latter course of action, once you complain to the FOS, your bank has eight weeks in which to resolve the dispute or incur a £360 fine.
This fact alone may lead your bank to settle your claim. At present, there are no published FOS decisions relating to bank charge cases, so it is difficult to ascertain its view on such a situation, although it will undoubtedly evaluate the administrative burden the bank has incurred.
An FOS application must be made within six months of your bank's final rejection of your friendly overtures about returning unfair charges.
A form must be filled in; help in doing this can be obtained by calling the FOS helpline on 0845 080 1800.
Sent my letter off on Friday.
