Illegal bank charges, Unlawful bank charges, and Unfair bank charges. So you've been charged by your bank and you don't understand why? Here is a practical guide to reclaim illegal bank charges, unlawful bank charges, and plain unfair bank charges.
Currently there is a court case in progress to decide if the bank are making money from illegal bank charges, unlawful bank charges, and unfair bank charges. As banks do not have to repay bank charges at the moment, they are not doing so unless they feel that the illegal bank charges, unlawful bank charges, or unfair bank charges are in fact bank error. Bank Error.
Banks to error on time to time, but it is very rare that a illegal bank charge is caused by bank error. However in some cases employees do make mistakes. Let us say for example that you have a packaged account (an account that you pay a monthly charge for, and in return you get stacks of benefits and discounts and services included). If you decide that you no longer want this account and if you are entitled to remove the deal from your account you go into your bank to have this removed. You need to sign something to agree the removal (as banks keep an extensive paper trail as proof of EVERYTHING), and in return you should get a receipt. If for some reason your account doesn't get changed to a standard account and you continue to get charged, resulting an an un-arranged bank charge, this is classed as bank error. In this instance you need to take your receipt. to the bank and demand a refund. This can't be refused. Unfortunately as I have just mentioned banks keep evidence of everything done and bank error is uncommon. Reasons for getting bank charges. Guaranteed Card Payment Fee.
Unless you can keep on top of your money, using a debit card can be very dangerous. People believe that if they don't have the money then the card will be refused. Unfortunately not in every case. Shops and ATMs do not have real time communication with the banks. At times it is impossible to know if there is money in the account. A shop has what is called a floor limit on their card transactions and all transactions under a pre-specified limit will authorize without contacting the bank. on top of that, retailers have the option to hold that payment on their systems for up to 6 months without communicating that information to the bank. So how could the bank possibly know if you have spent the money? It can't. It is up to you to keep track of how much you have been spending. This also applies to cash machines, however cash machines do generally update much quicker. Paid & Unpaid Referral Fees.
Direct Debits and Standing orders are a major cause of bank charges. If you have a direct debit or standing order that is due out of your account and you do not have the money for it you will get a charge. in some cases the direct debit won't even get paid to the company so the company will re-request the direct debit and again if you don't have the cash then you will get charged. Even if you cancel a direct debit with the bank, the company can present the direct debit instruction under another reference number and the money will still be paid (or not as in some cases), resulting in more charges. The banks have little control over this system as there are literally millions of direct debit instructions and it is impossible to review and authorize each one individually. If you are not going to have the money in your account, cancel the direct debit about 3-4 working days before it is due. A little tip on managing direct debits. if you have a direct debit due out on the 10th for example the direct debit will leave the account on the previous working day. i.e. in most cases it will leave on the 9th. However if the 10th happens to fall on a Saturday, Sunday or a Monday, then the direct debit will actually leave the account on the Friday! Learn and understand this phrase "I need to have the money for my direct debit in my account on the last working day before the direct debit is due at the latest". Say that out loud 3 times. Un-arranged Borrowing Charges.
If you are taken overdrawn at any point in that month then the bank will apply a charge to your account. The charge will leave the account on the last working day of the month. In the banks eyes they say this is to allow you replace the money and find money to cover the charges. They let you know roughly 2 weeks in advance. In reality the charge is applied on the last working day of the month so the customer is then overdrawn on the first working day of the next month and so gets a charge at the end of the next month too (and so on and so fourth). Credit Zones (commonly known as the overdraft).
People will argue with a bank that the charges they have been given are illegal and should not have been applied as they do not have an overdraft facility on the account. Wrong. There are Arranged overdrafts, and Un-arranged overdrafts. The long and short of it is, everyone has the facility and is free to use it. The only difference is the charges. For an arranged overdraft there is no monthly maintenance fee and there is a small monthly rate of interest which is usually around 1.5% per month. For an un-arranged overdraft there is a monthly charge and a higher rate of interest. The bottom line is, you CAN go overdrawn weather you have agreed the facility or not. My advice to you is to arrange the facility if you have the option - would you prefer a direct debit to come out of your arranged overdraft if you do not have the funds for it, or would you prefer it to come out of an un-arranged overdraft and get charged for the luxury? Don't fight the charge, Address the issue.
When it comes to bank charges, the banks do have you be the short and curlys. You have agreed to accept the charges and you are contractually bound to them. Instead of kicking up a fuss about them you need to grab the bull by the horns and address the issue. Go into your bank and speak to someone about it, but instead of shouting and screaming the odds at the first employee you can get your hands on, ask them for help. At the end of the day branch and call canter employees have not set the rules, they have not applied the charge manually to your account have they? No. So give them a break. These are the people who can advise you best on what to do. They will tell it like it is, and weather or not it is what you want to hear, it is the best way forward. You need to establish exactly how much you are due to be charged and the days that they will be coming out of your accounts. You need to account for that money, and make sure it is there the working day before the charge is due. This is the only way to break the charge cycle. You may not want to pay the charge and fight it, but in the long run you could end up with thousands of pounds worth of debt and a ruined credit file. Remember that the banks are in court waiting for a ruling - let the FSA fight it out with them, not you. Your job is to keep your charges minimal in the event that the courts rule in banks favour. Prevention is better than the cure.
Be smart with your money - avoid the charges in the first place. If you have had problems with card payments - pay in cash. If direct debits are causing you issues - contact the company and ask them to send you a giro. Your local branch can tell you what money you have available, so use the facility. Use online banking to keep a track of your money - it takes 2 minutes to log on to your account online and check how much money is available.
With any luck the courts will rule against the banks and you will be able to reclaim anything you have paid. We will address that issue when it comes about.
http://www.unlawful-bank-charges.co.uk
Article Source: http://EzineArticles.com/?expert=Chris_Braithwaite
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