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Consumer fightback: What can I reclaim?,,,

 

Have you been the victim of dastardly behaviour by your bank or insurer? This is Money's Campaigns Editor Simon Lambert explains how to reclaim bank charges, credit card charges, loans insurance/PPI and mortgage fees.

Consumer fightback: Could you battle back against banks, and insurers and reclaim what you are owed?

Over the recent years banks, building societies and insurers have been repeatedly exposed for not having treated their customers as fairly as they should.

Charges for going overdrawn on current accounts, penalties for overspending on credit cards, useless payment protection insurance, and the mortgage exit fees, have all given consumers a raw deal.

This unfair treatment has lined the pockets of institutions that pay lip service to customer service and the idea of offering a good deal.

But the good news is that people who have been wronged have been successfully reclaiming bank and credit card charges, PPI premiums and mortgage exit fees.

Find out what you are owed:

Bank charges

The background

For years banks and building societies have regularly charged customers who exceeded authorised overdrafts or bounced direct debits and cheques penalty fees of around £30 per time.

But after campaigners highlighted these fees could be tacked through the courts, hundreds of thousands of people have successfully reclaimed charges.

The refusal by the banks to fight cases that would create a precedent, as well as the huge numbers of people clogging the small claims courts, led the Office of Fair Trading to bring a test case in the High Court with the main High Street banks that should settle the matter.

The judge in the case found that the OFT could assess charges for fairness, and the banks involved appealed. The banks lost this appeal, but have threatened another.

While a decision is sought the Financial Services Authority has granted banks a waiver from dealing with cases until it is settled.

Essential reading: >> Ten steps to reclaim bank charges

Can I reclaim bank charges?

The answer to this depends on your situation. Banks and building societies involved in the case or who have applied for the FSA waiver do not have to process claims until the test case is settled.

Experts have advised customers to continue putting in claims, so that if the OFT wins its fight they are in the queue for reclaiming.

Hardship

The FSA has said that consumers who are in very difficult financial circumstances – 'hardship cases' will still be entitled to have their complaints dealt with. Those who are suffering genuine financial difficulty should make a claim regardless of the waiver. If they are dissatisfied with the response they should ask the Financial Ombudsman to review their case.

Business bank accounts

The FSA waiver and OFT court case apply only to providers of current accounts with overdraft facilities. This meant that unfair charges on business bank accounts could still be reclaimed. Banks are likely to tell claimants they cannot claim because of the court case, however, customers should point out the bank's error, persevere with their claim and take the matter to the Ombudsman if necessary. Unfortunately for those hoping to reclaim business fees, the judge in the bank charges case undermined the key argument for business charge reclaiming when he said unauthorised overdraft charges were not penalties.

The OFT, the British Banking Association and the courts have failed to clarify how this affects those hoping to reclaim business bank charges, so if claimants wish to push ahead they can, but may be disappointed in the end.

Essential reading: >> Reclaim business bank charges >> Businesses barred from reclaiming charges >> My business bank charges reclaim hell

Credit card charges

The background

It is possible to win back your card charges using similar tactics to those bank customers have used to reclaim penalty fees. The principles for challenging both charges are the same – there is a legal difference between charges that can be imposed for breach of contract and penalty charges.

Can I reclaim credit card charges?

Many people who have attempted to reclaim credit card charges have had responses from their bank saying the case will not be dealt with due to the FSA bank charges waiver.

If this happens write back to your credit card provider, pointing out that the waiver applies only to 'providers of current accounts with overdraft facilities' and that if they do not settle your case satisfactorily you will either go to court or the Financial Ombudsman.

Essential reading: >> Ten steps to reclaim credit card charges

Payment protection insurance/loans insurance

The background

Payment protection insurance, also know as PPI or loans insurance, is sold alongside loans, credit cards, store cards and credit products like car finance agreements, to cover repayments if you cannot make them.

If you cannot work because of an accident or illness, or if you are made redundant, PPI is supposed to cover the payments for a period.

The problem is that the PPI generally sold by lenders is extremely poor value, with any potential benefits far outweighed by the huge cost. PPI is very often sold to people who will never be able to claim on it. The terms of PPI policies are tightly drawn so most of the instances where people hope to claim are not covered. Most PPI will not cover you if you are self-employed and cannot work.

It won't cover you if were retired when you took it out. It won't cover you if you have to stop working because of a medical condition that you did not mention, or were not asked about, when you took the insurance. It won't cover stress or back problems – the two most common reasons for people being unable to work.

This is Money has been campaigning on PPI mis-selling and the OFT and FSA have both recently taken action on the subject. The Competition Commission has ordered tough new rules on its sale and anyone reclaiming stands a good chance of winning.

Essential reading: >> How to reclaim PPI

Can I reclaim PPI?

The clearest cases of mis-selling are those where customers were sold the insurance when they had no chance of claiming on it.

If the firm, or the Financial Ombudsman Service, agree that you were mis-sold the insurance, you should get back all the premiums you have paid, with interest added at 8% - the same figure a court would award.

It may be that you weren't mis-sold the policy in the first instance, but were treated unfairly when you went to cancel the cover. FSA rules say when a customer cancels a single-premium policy, the firm should give a 'fair' refund.

Essential reading: >> Test: Can you reclaim your PPI premiums?

Mortgage exit fees

The background

Mortgage exit administration fees are the charges levied on borrowers when they switch mortgage providers, or pay off a mortgage before the end of its term. For years they remained stable at around £30 to £50, despite small print which listed them as variable fees.

Then, from around 2004, lenders began to hike fees in attempt to claw back some cash from the increasing number of homeowners switching to better deals.

Lenders argued they had a right to increase the fees – because mortgage contracts said they could, but after pushing them as high as £300, the FSA stepped in and agreed increases were unfair.

Borrowers should remember the difference between exit fees and early repayment charges. Exit fees are the administrative charge for leaving a mortgage, whereas early repayment charges are penalties imposed for leaving before an agreed time period is up, which should have been clearly laid out. Only exit fees can be reclaimed.

Can I reclaim mortgage exit fees?

The FSA investigated exit fees, charged for administration when someone left a mortgage, and said they should fairly reflect lenders' costs. It said that if lenders wished to charge exit fees they should be clearly laid out and justifiable.

Tens of thousands of people have claimed back unfair charges levied after fees began to increase.

The least people can claim back is the difference between the exit fee when they signed up and the exit fee they paid - some lenders are refunding the entire fee. If you have paid more than around £50 for an exit fee it is worth complaining and asking the lender to justify the fee. If you are not satisfied with their reply, take your case to the Financial Ombudsman.

Essential reading: >> How to reclaim mortgage exit fees

More consumer advice

Have you been unfairly treated? Find out how to:

>>Get back BT's unfair charge for not paying by direct debit BT has started charging customers who do not want to pay by direct debit, even if bills are paid on time. You can dodge the charge and get your money back. Find out how.

>>Fight parking tickets Most drivers who appeal their parking ticket win. Don't pay to fight your fine, use our guide.

>> Challenge council tax bandsYou could be entitled to a council tax rebate if you are in the wrong band - but beware bills could also rise.

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