Lead the charge on overdraft fees; Ask Anne; Life, love and angst Anne Diamond answers your questions; How to claim back and help end costs for good.
Byline: MARTIN LEWIS, Anne Diamond
Hurrah! The death knell may finally be sounding over bank charges for breaching your overdraft limit. Lloyds banking group has announced overdraft changes from November that includes plans to scrap these charges.
I hope others will follow. Yet, if you've had these charges, you may be due money back. Bank charges have ruined many lives, as they were designed to be tough to repay, leaving people to accrue charges on top of charges.
Too often I've heard of people who have had charges snowball into thousands after one small issue (such as late payments by the benefit office causing direct debits to bounce).
Around a decade ago, I was often called the "big gob in chief " of the campaign to reclaim unfair bank charges. My free template letters were downloaded over six million times, and over a billion pounds was paid out.
Yet sadly, in 2009, the Supreme Court pulled the plug on mainstream bank charge reclaiming due to a legal technicality that meant they "didn't have to be fair".
However the pressure continued to reverberate and the campaign's legacy has driven down charges ever since. This Lloyds move is perhaps its ultimate victory.
Can I reclaim bank charges now?
Charges need to have contributed to genuine financial hardship; such as being unable to repay your mortgage, rent, energy or credit cards or you regularly had payments returned due to a lack of cash. If they have, write to the bank explaining your situation, and asking for a refund of all charges over that period. My full step-by-step help and free template letters are at mse.me/bankcharges. Do expect a rejection - after that you can then take it on the free financialombudsman.org.uk service for an impartial adjudication.
To inspire you, Scott emailed to say: "Initially the bank said I wasn't due anything, despite being stuck in an overdraft cycle. I then used your info & was offered PS576. Thank you."
I'm not in hardship, can I do anything? Frankly it's difficult. If it's a first time one-off charge it's always worth politely asking the bank to remove it. Often (no promises) it'll wipe it first time.
Can I cut the cost of my overdraft? If you're overdrawn, debit cards are debt cards too. Overdrafts often cost more than credit cards - so try to avoid them. If you're stuck in one, there are a couple of cheaper overdraft providers.
New firstdirect.com switchers get PS100, and a PS250 interest-free overdraft. So use the free cash to reduce your debt, then stick within the 0% limit.
The nationwide.co.uk Flex Direct account offers switchers a one year 0% overdraft, then 50p a day after - so use the interestfree time to clear the debt. The limit can be a lot larger than First Direct. I've heard of some getting more than PS1,000.
It's also possible to shift your overdraft to a specialist 0% "money transfer" credit card for up to 41 months. Full help and tips on fighting overdrafts at mse.me/cut-overdraft-costs
FIGHT BACK Complain if you have been unfairly charged
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|Title Annotation:||Features; Opinion Column|
|Publication:||Sunday Mirror (London, England)|
|Date:||Jul 30, 2017|
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