Parents Information
Unfair Bank Charges
When you make donations by Standing Order or Direct Debit it can be easy to forget when a payment is set to leave your account. When you have a difficult month you might slip just over your overdraft limit. Unfortunately when this happens banks can impose some very high charges, often disproportionately high in relationship to the amount and the length of time you were overdrawn.
The Office of Fair Trading has tried to tackle this issue but a Supreme Court ruling in November 2009 found in favour of the banks, dashing hopes that bank customers could claim back their "unfair" penalty charges.
More information is available from www.moneysavingexpert.com. Just type in "unfair bank charges" in the search box.
You may be able to get your charges repaid if you can claim financial hardship but even this avenue has been cut off by the court ruling. So what are your options?
- Try and negotiate a small overdraft arrangement with your bank so if you do go inadvertently overdrawn you will not get landed with a heavy unauthorised overdraft charge.
- Shop round to see how much the different banks and building societies charge if you go overdrawn by mistake. In anticipation of losing the case, some banks and building societies have already dramatically reduced these charges. So vote with your feet!