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Unfair Credit Card Charges
Unfair Mortgaget Exit Fees
Unfair PPI Payments
While banks are still opposing the ‘unfair’ ruling in the courts, you may have to wait until the appeal has been finalised before you can make a claim. However, if you are in financial hardship, you are entitled to your money now! Start reclaiming £000s today. Find out more by clicking:
Bank charges can be applied to your account whenever you find yourself in the red. It could just be a margin of pennies or pounds, but slipping into an unauthorised overdraft can be a costly business. Charges vary depending on the bank but tend to be anything from £25 upwards. Invariably, however, it can feel like being kicked when you are down.
The same applies for returned cheques or unpaid direct debits. Bank charges on either can easily incur charges of £30 or £60. Bank charges are a lucrative business for the financial industry. According to Which? Magazine, £4.7bn in fees was applied in the past year to overdrafts alone.
The sting of bank fees can be smartest when you have defaulted by as little as a day. For example, a modest maestro transaction may have left your account 24 hours before payday and as a result you face a £25 bank charge. If that sounds familiar, fear not, you have an ally.
Bank charges are considered illegal by law when the penalty is unreasonably high. The penalty should only reflect the administrative costs of dealing with the default. Therefore if the cost of sending you a letter is say £1, a bank charge of £30 would be deemed unreasonable and wholly unfair – by law. Banks can only recover what they have lost.
Claims for unfair bank charges are currently on hold pending the outcome of a high profile court case – keep up to speed with developments by clicking: Bank Charges Update.
Last year, the Office of Fair Trading ruled that credit card companies should not charge more than £12 for default charges. The announcement not only put pressure on companies to justify higher charges, but also underlined customers’ rights. Since the OFTs ruling, credit card customers have been successfully reclaiming unfair charges from their card providers.
When making a refund claim for unfair credit card charges, some card providers have used the OFT and banks’ test case on bank charges and the FSA waiver as an excuse dismiss your case. However, when this has occured we inform your credit card company that the FSA waiver states: “We are making this waiver by consent available only to providers of current accounts with overdraft facilities.” This means your credit card company cannot claim immunity from legal action.
If you were subjected to an unfair credit card charges and would like to get your money back, click:
Anyone who either pays off their mortgage ahead of the full-term agreement, or switches to another provider mid-term, will be liable to pay a mortgage exit fee.
A mortgage exit fee is not to be confused with a Redemption Penalty. The former is a charge to cover administration costs whereas the latter is a penalty for, in a sense, breaking an agreement with your mortgage provider. Redemption penalties are usually the consequence of switching mortgage providers at the end of an introductory or otherwise discounted loan period. Therefore a Redemption Penalty is in place to protect mortgage providers from being ‘used’ by customers for short term benefits.
However, since 2004, many banks/building societies have been increasing mortgage exit fees way beyond any reasonable measures. Customers, backed by the OFT, objected to the inflated ‘administration costs’, some of which rose from £70 to £295. The result? Customers who paid more than the mortgage exit fee stated in their original contract are now eligible for a refund. If you were subjected to an unfair mortgage exit fee and would like to get your money back, click:
Payment Protection Insurance is designed to cover you should you be unable to make a payment on a loan, credit card or finance agreement. In the event you are ill, made redundant or suffer an injury, PPI takes care of it. Or does it?
According to the Office of Fair Trading, only 1 in 5 PPI claims are successful. This statistic has lead to an investigation by the OFT and Financial Ombudsman into the way PPI policies are sold to the public. In many cases, policies are sold to people who would not be eligible for cover, such as the self-employed. In other instances, PPI policies are overpriced and added onto the cost of the loan, making it subject to interest rates.
If you have a PPI policy, you may be eligible for a refund. For more information, click:
In 2006, the Office of Fair Trading announced any default charge in excess of £12 would be considered unfair. The OFT said, “Setting a threshold for intervention is a pragmatic pro-consumer action that is designed to give the industry the opportunity to change its practice without litigation.”
The OFT added that the £12 threshold does not necessarily mean anything below that amount is fair and expects the finance industry to change its practice to avoid legal consequences. So, what has been the result? Increasing numbers of bank customers successfully recouping bank charges for periods up to six years.
Since the intervention of the OFT (plus pressure from consumer groups), thousands of court claims have been levelled at banks. Since banks fear revealing their cost structures or ‘opening their books’ in a public arena, over £50m has been settled outside of court. Therefore Debts believes the consumer can safely conclude banks are aware of exploiting defaults made by its customers.
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