I was thinking about something to post the whole journey into work this morning, but could come up with nothing.
However, reading a BBC News report has given me some inspiration.
BBC News | Business | Your Reporter: Unauthorised overdraft fees
A very good and fair report on a subject that can sometimes be very close to home.
I have a very small overdraft, purposely, because I don’t want to be always living within it, as I’m sure you can all appreciate.
However, there have been ocassions when, and I’m sure I’m not the only one, I’ve slightly miscalculated a direct debit or card payment and it has taken my account, albeit ever so slightly, over my agreed overdraft limit.
I bank with an internet bank that is part of the HSBC group.
Being internet and telephone only, historically their interest rates have been good (high for savings, low for borrowing), however, they recoup their money in other, more covert ways.
Unauthorised overdraft penalties are higher than average highstreet banks, Ã‚Â£30 for going over and then an additional Ã‚Â£35 if you are still over when your monthly statement is generated.
I have, as I’m sure a lot of other people have too, been hit by these charges, for exceeding my overdraft, even just for 24 hours by the smallest, most trivial amounts.
One example that jumps to mind is the 98p that I went over by, around about a year ago.
For there trouble, of letting me have an extra 98p for a day I was charged Ã‚Â£30.
(For American readers to appreciate the level of extortion, thats $1.81 dollars over my limit and charged a fee of $55)
Now, we come to the purpose of this post.
The Office of Fair Trading (OFT) has commented on the matter, claiming that,
Charges, “should only reflect the administrative costs of dealing with the default”
In January of this year, a consumer group, named The Bank Action Group (BAG) was formed “as a self-help organisation showing consumers how they can go about legally claiming back bank charges.”
According to them, if the bank in question is challeneged, rather than going through the courts, where the judgement would most likely be in the claimants favour, the banks and building societies will simply pay back the charges.
Dave Smith of BAG gives this advice on how a consumer should go about attempting to reclaim excess overdraft fees;
“First they ask their bank or building society to detail all bank charges going back six years,” he says. “They have to provide this information under the terms of the Data Protection Act.
“The consumer then writes stating their intention to sue in the county court for return of the charges.
“Under breach of contract law, penalty charges – such as those imposed for exceeding an overdraft limit – are unlawful. The banks know this.”
So, as a test case, this is what I shall attempt to do.
I want to find out how many of my charges I can recoup from my bank.
More to follow…
I have requested, under the Data Protection Act 1998 that the bank send me a statement of all my charges since I have been with them. They have complied and will be with me in a few days.