How-to Guides » OLD GUIDE Reclaim bank charges

Take court action

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If you’ve carried out steps 1 to 3, and haven’t had a result, the next step to begin court proceedings.

Just be aware before you start that, here at lovemoney.com, we have no idea whether you will win or lose. Bank charges cases under the Consumer Credit Act have not yet been tested. Until they are, you may want to consider very carefully whether you can afford to lose the money you might have to spend taking a bank to court.

You don't need a solicitor at the hearing if the claim is less than £5,000, as it's all rather informal. It'll cost around £130, which you can add to your claim. If you lose, you won't have to pay the bank’s costs unless it can show that you’ve acted unreasonably. If your claim was for more than £5,000, you should instruct a solicitor before proceeding.

If you’re happy to proceed, then get all your paperwork together. Then log on to HM Courts Service website Money Claim Online to file your claim. It's free to use this service but you have to register first.

There are eight steps to filing your claim, and you have guidance in the form of a Help button and an online tutorial, but it's very easy on the whole. Even so, here are some helpful pointers:

'Claimant' means you.

'Defendant' means the bank or credit card company you're claiming against. Use the defendant's registered name, which should be at the bottom of its letterhead paper.

When prompted to enter the defendant's address, use the bank or card company's registered office. This address should be at the bottom of its letterhead too.

'Particulars of claim' is a fancy legal term to mean a description of your claim, including the amounts involved and interest, so that the judge understands precisely what you're claiming. The defendant also has to understand what you're claiming so that they can put in a defence.

Here's an example of what you should write in the 'Particulars of claim' box:

The Defendant has imposed charges of £30 each time the Claimant has exceeded his overdraft limit. These charges represent a penalty and do not accurately reflect the Defendant's administration costs. Further, they are contrary to section 5 of the unfair terms in consumer contracts regulations 1999. The charges the Claimant claims are £30 on 01/06/06, £90 on 02/05/06, £60 on 01/12/05. The total charges he is claiming are £180. The claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year from the dates that each of the charges were made, a total of £6.01 up until 08/08/06 and continuing interest at a daily rate of £0.39. AND THE CLAIMANT CLAIMS £180, interest, costs.

It's not a pretty paragraph, but that's because you're allowed just 24 very narrow lines of text. You also can't use special punctuation marks. However, it gets the message across. If you're claiming lots of charges you may need more space, in which case you could delete the bit in italics. Don't worry! Online small claims are very informal; you're not expected to know legal chapter and verse.

Calculating interest

In the example 'Particulars' above, we mentioned interest at 8%, because this is the interest rate you can claim through the courts at present. You can work it out in two ways. You can either calculate it from your latefst charge, or you can calculate the interest on each individual charge.

To calculate it from the latest charge, add up all your charges. Let's say they come to £400, and the date of the last one was the 1st May 2004. To get the annual interest rate, you multiply £400 by 8. Then you divide by 100. The answer is £32 per year. Now you get the daily rate by dividing £32 by 365, which is £0.0877. Round this up to £0.09. You then multiply this by the number of days between the 1st May 2004 and the date you're processing your claim online. If that was today, it'd be 829 days. £0.09 x 829 is £74.61 in interest.

To calculate the interest for each individual charge, you work out the interest on each charge from the date it showed up on your statement. This is more accurate, but it can be time-consuming, so it depends how badly you want the money or, perhaps, how much you hate your bank!

If you can't work it out, overestimate the interest. The judge can adjust it downwards, but won't adjust it upwards over what you've claimed.

What happens next?

The court will 'serve' the papers to you and to the Defendant (your bank). Your bank then has just a few weeks to respond.