Like many, I've downloaded the templates off Martin Lewis' site moneysavingexpert.com to try and reclaim unlawful punitive bank charges over the last 6 years. I worked it out, and after having a bad year 4 years ago when I kept hovering around my overdraft limit, I racked up approx £1100 worth of unauthorised overdraft charges.
After sending them a letter demanding it back, with interest, I came home this weekend to find I've received a settlement offer from them which states:
May I say how sorry I am to learn that you feel the bank charges you have incurred are unfair. In you correspondence you have referred to elements which you feel support your claim. Barclays is aware of the information you have drawn to our attention. I must inform you, however, that we disagree with your view.
When an account is opened with us, our customer is provided with a copy of the Terms and Conditions relating to the use of their account; including details of our charges. This information clearly explains our obligations to our customer, as well as their obligations to us. If we make any changes to the Terms and Conditions, we provide details of these changes to our customers in line with the Banking Code. Details of our Terms and Conditions, along with our charging tariff, can be obtained at any of our branches, or via our internet site, www/woolwich.co.uk/barclays.co.uk.
Despite my comments above in relation to your views, on this occasion, and without any admissions of liability, I am willing to offer the sum of £860.00 towards the total amount you are seeking. This is with the cost and inconvenience inherent in a further dispute in mind and is intended as a gesture of goodwill, in full and final settlement of your complaint. If you would like to accept my offer please sign and return the enclosed form in the pre-paid enveloped provided. I will arrange for the payment to be credited to your account within seven working days of receipt of your acceptance at this office.
So, shall I accept or stick to my guns and hold out for the full amount?
I've had a look through the advice posted in the forums as well as the main articles on moneysavingexpert.com, and my conclusion is this:
Most of the success stories on moneysavingexpert.com state that they were either offered the full amount in the first instance, or they rejected the first offer, started small claims court proceedings, and then the banks quickly paid the full amount. However, there is an Office of Fair Trading (OFT) ruling expected within the next couple of weeks that could change the situation.
The OFT are due to make a ruling on unfair bank charges within the first few days of April, and are likely to say the banks should be charging no more than £12, even though in actual fact independent experts agree that it costs the banks no more than £4.50. My charges were initially £20 and then rose to £25. I've worked out the mean average and it's roughly £22. Which means, after the OFT ruling, the banks will likely only agree to pay the difference, in my case this would be £10 per charge. So based on my 54 charges that would work out at £540 - so at this point the £860 offer looks a good one.
Now of course the OFT ruling doesn't bind the courts. I could still take Barclays to court and it would be up to them to demonstrate to the courts that it costs them more than £4.50 per penalty charge.
Martin's summary conclusion is that after the OFT ruling you are MORE likely to get some money back without a fight, but LESS likely to get all your money back without a fight.
Taking all of that into account, and the fact that we're hoping to emigrate within weeks, and have much more pressing issues to deal with, my own conclusion is that I'm going to accept their offer. I could probably get more back if I pushed it, but I've neither the time nor the inclination given our present circumstances.
This doesn't mean I'm grateful to Barclays. They had absolutely no right charging £25 for an unauthorised overdraft fee when the law clearly states that punitive charges must be no more than the actual cost incurred by the bank. What's more, even though hundreds of thousands of us are reclaiming our bank charges it's obviously having little affect on their bottom line given the amount of profit the banks have announced this year.
Fight the bastards. Consumer power - I love it!!