Bank Charge Claims and Disputes
Clear Legal Guidance from Zavri Law
Banks apply a range of fees to manage personal and business accounts. These may include overdraft interest, account management fees, credit card charges, and other service-related costs. While many charges are lawful and clearly explained in your agreement, others can accumulate quickly and create financial pressure.
If you believe your bank has applied unfair or disproportionate charges, you may have grounds to challenge them.
What Are Bank Charges?
Most banks apply fees such as:
Overdraft interest (arranged and unarranged)
Monthly account management fees
Credit card charges
Transaction fees
Penalty charges
Cancellation fees
Fees for packaged bank accounts
Payment Protection Insurance (PPI) premiums
Many customers also experience disputes involving business loans, account errors, fraud, or administrative mistakes.
Not all bank charges are unlawful. Charges that were clearly explained and agreed to—such as foreign transaction fees or optional packaged account fees—are generally enforceable. However, fees that are excessive, unclear, or applied unfairly may be challenged.
Can You Reclaim Bank Charges?
You may be able to dispute certain charges if you believe they are:
Incorrect
Disproportionate
Applied without proper explanation
Contributing to financial hardship
Refunds are not automatic. In many cases, banks review complaints individually and may offer goodwill refunds, partial refunds, or alternative repayment arrangements.
The first step is to submit a formal complaint through your bank’s official complaints process.
Common Bank Charge Disputes
Typical disputes include:
Monthly fees for packaged accounts
Overdraft charges
Credit card over-limit fees
Penalty fees
Cancellation fees
PPI-related complaints
Returned payment fees
Unarranged overdraft interest
If charges have escalated due to repeated fees being added before you can clear previous ones, you may be experiencing what is commonly called “snowballing” charges.
Am I Eligible to Reclaim Bank Charges?
Banks are required to treat customers fairly and ensure their products are suitable. You may have a valid claim if any of the following apply.
1. You Are Struggling Financially
You may be eligible to challenge charges if:
You are struggling to pay for essentials
Your income has significantly reduced
You have lost your job
Your spending has increased due to illness or disability
You are missing loan or credit card payments
Charges are consuming a large portion of your income
Payments are regularly being returned due to insufficient funds
You rely heavily on credit or increased credit limits
You frequently exceed your overdraft
In cases of financial hardship, banks should consider freezing charges, refunding fees, or offering structured repayment plans.
2. The Charges Are Disproportionate
If you exceeded your overdraft limit by a small amount and were charged a large fee as a one-off incident, this may be considered excessive.
These cases are generally stronger where:
The incident was isolated
You do not regularly exceed your limits
You are not persistently mismanaging the account
3. You Were Mis-sold a Packaged Bank Account
You may be entitled to a full refund (plus interest) of monthly fees if:
You were told a free account was not available
You were not given a genuine choice
You did not need or use the benefits included
You could not use the insurance provided
The fees were not clearly explained
You were told the account was required to access another product
Mis-selling claims can result in repayment of all monthly fees paid since the account was opened.
How Much Could You Reclaim?
The amount you may recover depends on:
The number of charges applied
The frequency of those charges
Whether the bank agrees to refund them
If a matter proceeds to court and you succeed, you may also be entitled to claim statutory interest (currently 8% simple interest per year from the date of each charge).
Before making a claim, obtain a full list of charges from your online banking or request the information directly from your bank.
How Far Back Can You Claim?
Court claims are generally limited to six years (five years in Scotland).
The Financial Ombudsman may consider older complaints depending on circumstances.
Ombudsman claims typically must be made within three years of when you became aware of the issue.
Time limits are important and should not be ignored.
Can You Claim Overdraft Charges?
You may be able to challenge overdraft charges if they are excessive relative to the amount overdrawn.
However:
One-off mistakes are viewed differently from repeated misuse.
Persistent overdraft reliance may weaken your position.
Each case depends on its specific facts.
Can You Claim from a Closed Account?
Yes. You can pursue a claim even if the account has been closed for several years. However, limitation periods still apply if the matter proceeds to court.
How to Handle a Bank Charge Dispute
Step 1: Submit a Formal Complaint
Contact your bank and clearly explain:
What charges you are disputing
Why you believe they are unfair
Whether you are experiencing financial hardship
Provide supporting evidence where possible.
Banks have up to eight weeks to issue a final response.
Step 2: Follow Up
If you do not receive updates or a final decision within eight weeks, you are entitled to escalate the matter.
Step 3: Escalate to the Financial Ombudsman
If you are dissatisfied with the bank’s response, you can refer the matter to the Financial Ombudsman Service.
The Ombudsman will consider:
Relevant laws
Industry standards
The bank’s terms and conditions
Whether the bank treated you fairly
Possible outcomes include:
Full or partial refund
Removal of adverse credit information
Freezing further charges
Compensation for distress or inconvenience
A revised repayment plan
Changing your account to a more suitable product
The Ombudsman service is free for consumers.
Step 4: Legal Action
If the Ombudsman does not uphold your complaint, you may consider court proceedings.
Legal advice is strongly recommended before issuing a claim, particularly where large sums are involved.
Business Bank Charge Disputes
Businesses can also challenge unfair charges.
Common business banking fees include:
Application fees
Monthly service charges
Overdraft interest
Transaction limits
Deposit fees
Refused payment charges
Foreign transaction fees
Transfer fees
ATM charges
Card issuance fees
If your business has been charged fees that were not clearly agreed or properly explained, you may have grounds to dispute them.
Businesses may also claim consequential losses in certain circumstances.
How Long Does a Banking Dispute Take?
There is no fixed timeframe.
Straightforward complaints may resolve within weeks.
Complex disputes may take several months.
The duration depends on the evidence, the amount involved, and whether the case escalates to the Ombudsman or court.
Should You Use a Claims Management Company?
Claims management companies often charge a significant percentage of any refund. Their success rates are not typically higher than if you complain directly.
In most cases, it is better to:
Complain directly to your bank
Escalate to the Financial Ombudsman if necessary
Seek legal advice if required
Will Reclaiming Charges Affect Your Credit Score?
Making a complaint will not damage your credit file.
However, your credit score may be affected if:
You exceed agreed limits
You miss payments
You fall into arrears
Late or missed payments can remain on your credit file for six years.
In some cases, banks may restrict or close accounts following disputes. It may be sensible to open an alternative account before pursuing a complaint.
What If You Cannot Access Old Statements?
You can request copies of statements from your bank.
If the bank refuses or delays, you may submit a Subject Access Request asking specifically for a list of charges. A reasonable administrative fee may apply in limited circumstances.
How Zavri Law Can Help
At Zavri Law, we assist clients with:
Reviewing bank terms and conditions
Assessing whether charges are legally challengeable
Drafting formal complaints
Escalating disputes to the Financial Ombudsman
Representing clients in court proceedings
Advising businesses on complex banking disputes
If you believe you have been unfairly charged, early advice can significantly improve your position.
Important Disclaimer
This content is provided for general informational purposes only and does not constitute legal advice. Every case depends on its specific facts. You should seek independent legal advice tailored to your circumstances before taking action.