If you have a cheque or direct debit payment bounce, or exceed your overdraft by as little as £1 you could be charged around £30 on each occasion. The estimated cost to the Bank is around £2.00 (calculated by banking industry data) leading us to believe that bank charges are unlawful, and that you could be entitled to get your charges recovered.

Banks do not agree that their charges are unlawful, claiming that ‘unfair contract’ terms do not apply to bank charges, but the Office of Fair Trading (OFT) disagreed and have started a ‘test case’ to find out.

Up until July 2007, some customers were being refunded unauthorised charges when complaining whilst others were not. The FSA didn't believe this inconsistent approach was in the interests of all consumers. So on 27 July 2007, the FSA granted a number of banks and building societies a 'waiver' whilst the test case was running. The waiver was granted for Banks so that they do not have to deal with complaints about unauthorized charges until the end of the test case. Banks and building societies can put customer complaints about charges 'on hold' until the test case is finalised.

The first waiver expired on 26 July 2008. A second waiver was then granted, which expired on 26 January 2009. This again was extended until 26 July 2009.

Both the High Court and Court of Appeal have decided that bank charges are governed by the unfair contract terms, and the ‘fairness rules’. The OFT will decide if bank charges are actually unfair, when the test case has been resolved. The OFT and have already provisionally said they think that bank charges are indeed unfair.

Whilst the test case is in motion bank charge reclaiming has been placed on hold pending the courts decision. This does not apply if you're in financial hardship. We can advise you of the conditions that need to be satisfied to qualify for financial hardship.

There are 100,000s of people who are in the queue to reclaim charges, so the sooner you make your claim the better, as the further ahead you are in the queue, the quicker your claim will be processed.

We can take on any claims that date back to 2001. We require full details of all your charges, which we establish directly with your Bank. In order to establish the exact amount you have paid in charges we request full details of all charges paid from your bank. Bank and Building Societies charge £10 to provide such details, which are then sent to us to assist with your claim. You may also be entitled to add 8% interest to the charge.

Reclaiming shouldn't affect your credit rating or appear on your credit file.

Timeline of events

2005. First successful bank charge claim.

JUL 2007. The banks agreed to a test case with the OFT. Its aim was to gain clarity on whether bank charges are lawful or not. The Banks involved in the test case are Abbey National plc, Barclays Bank plc, Clydesdale Bank plc, HBOS plc (includes Halifax and Bank of Scotland), HSBC Bank plc, Lloyds TSB Bank plc, Royal Bank of Scotland Group plc (includes Natwest) and Nationwide Building Society.

JUL 2007. Test case announced and the Financial Services Authority FSA (FSA) placed a 'waiver' on bank charges reclaiming subject to the outcome of the test case.

JAN 2008. Evidence submitted for the test case.

APR 2008. The result of evidence submitted in the test case confirmed that charges ARE governed by fairness rules.

OCT 2008. Results on evidence of historic charges: Charges CAN be classed as unfair.

OCT 2008. Banks appeal unfairness decision.

JAN 2009. FSA extends the waiver for a further six months through to 26th July 2009.

FEB 2009. Court of Appeal decision rule that Charges are governed by the fairness rules.

JUN 2009. The House of Lords sits to here the banks appeal.

What can be claimed:

• Returned Cheques, Direct Debit, and Standing Order fees
• Unpaid Direct Debit, and Standing Order fees
• Unauthorised overdraft fees
• Exceeding your overdraft limit fees
• Unpaid cheque fees
• Account misuse fees

What cannot be claimed:

• Cash Machine Withdrawal Fees (ATMs)
• Overdraft interest charges
• Monthly account fees on certain types of accounts
• Annual fees & service Fees
• Account Service Charges
• Charges incurred via foreign currency transactions/conversions