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Do you have
to pay bank or credit card charges? No,
not if
they are a penalty or 'unfair' charge. This website
tells you about UK
law on unfair charges and how to get your
money
refunded for free.
On 5 April
2006, the
Office of Fair Trading (OFT) concluded
that default
charges over £12 are automatically
presumed
to be unfair in terms of the Unfair Terms in Consumer Contract
Regulations.
Unfair terms are legally unenforceable.
Charges below
£12 may also be unlawful - the distinction is that the OFT will
only take enforcement action for charges above that figure.
Let's take a
standard example: you exceed your credit limit by £15.98, most
banks will send a letter charging £39, they may also impose a
£28 monthly unauthorised overdraft fee, and will almost
certainly levy unauthorised interest at over 30% per annum.
That's a mark-up of over 419%. Sound fair?
The legality
of bank charges has yet to be ruled on by a senior UK court but these
will not be enforced if they are found to be 'penalty' or 'unfair'
charges. The law is clear on that.
A contractual
party can only recover real or 'liquidated' losses at common law in
Scotland, England, Wales and Northern Ireland. While banks say
charges 'cover our costs' it is estimated that UK banks make £4.7bn
worth of fees each year from charges. Banks
impose charges to off-set the cost of bad debts - that is quite
different from the 'costs' in your case. The courts could also
find that charges are 'unfair' under the Unfair Terms in Consumer
Contract Regulations 1999/2083 - See OFT
NEWS.
Not sure how
many charges have been applied to your account(s) within the last few
years? You can request this information from your bank under the Data
Protection Act 1998 (DPA) for a cost not exceeding £10 (for all
accounts/years - see example).
An style DPA letter is here
(doc) (PDF) If you do
not receive a response within 40 days you should lodge a complaint
with the Information Commissioner.
Click
here for information on where proceedings can be raised in the UK.
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Navigate the links to find out how to get
a refund.
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