unfair UK bank charges

Charitable community controlled law centre in Glasgow, UK.  Charity no: SCO 30193.   www.govanlc.com


step 1 - send letter to your bank

step 2 - refused a refund? - send a final letter

step 3 - raise a court action or complain to the Financial Ombudsman:
[England/Wales/Northern Ireland]

ignored? - send this letter

your comments & experience
(updated 6 February 2007)

where can I raise proceedings?


online forum


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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.

Latest News:



Archived news: Sheriff gives go ahead for bank charges claims - (Murchison Law Solicitors of Inverness appearing for GLC). Sheriff Pyle's written judgment is available at: Thomson v Bank of Scotland; and Coleman v Clydesdale Bank; (added 11 September 2007). Five more bank charge cases to proceed at Edinburgh Sheriff Court  (added 12 September 2007)

Bank charges: GLC note on opposing applications by UK banks to sist Scottish claims pending the OFT's High Court case in London - links to PDF download (added 17 August 2007).

Guidance on opposing stays in England & Wales is available from the Consumer Action Group here (added 18 August 2007).

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 '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.

<< Navigate the links to find out how to get a refund.

Your comments & e-mails

example of bank charge letter

example of bank charge letter

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highest single refund

Law centre helps 1 million people battle banks over unfair fees

Sheriff Principal rejects bank's defence of res judicata (which sought to stop customers in Scotland pursuing subsequent £750 small claims for bank charges)

Judge warns bank over charges (BBC Money Box 27 January 2007)

OFT announce new investigation into current
account bank charges 
(7 September 2006)

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GLC is a member of Glasgow City Council's Advice & Information Network

letter to the Rt Hon Gordon Brown MP from Mohammad Sarwar MP on need for law reform on unfair bank charges (opens as PDF file)

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