How to receive bank charge compensation

Q&A on receiving bank charge compensation

Q: What is happening with the law on unfair bank charges?
A: On 27 July, the Office of Fair Trading (OFT), Lloyds TSB, six other UK banks and a building society started a court case to decide on the legality of unauthorised overdraft charges. Together, these banks and the building society provide more than 93% of current accounts in the UK.
This case is being called a 'test case' because the decision will clarify the law in this area and is likely to apply to all current and new claims against current account providers about unauthorised overdraft charges.
We will continue to post updates on our website to keep customers informed of progress on the test case as this could run for at least a year.
Q: What will happen to customer complaints about unauthorised overdraft charges?
A: banks will suspend dealing with or resolving customer complaints on unauthorised overdraft charges while the test case is running.
If you do complain about your unauthorised overdraft charges, we will write to tell you that we have received your complaint and that we will record it on your file. When a final decision is reached in the test case, we will contact you as soon as possible to tell you how we will resolve your complaint. We will apply the decision in the court case to all complaints we receive.
Q: Why are the banks allowed to stop dealing with unauthorised overdraft charge complaints during the test case?
A: We applied to the Financial Services Authority (FSA) for a suspension of the normal timetable for dealing with unauthorised overdraft charge complaints. The FSA decided that in the circumstances, it was appropriate to grant us a suspension of our obligations under the FSA's complaint handling rules whilst we seek legal certainty on this issue. The suspension is subject to a series of conditions designed to protect customers' rights. You can read the form of the FSA suspension (direction) here: www.fsa.gov.uk. All customers who have made a written complaint on unauthorised overdraft charges but haven’t yet had a final response will receive a letter to explain the position with respect to their complaint.
Q: I’ve recently requested copy statements as the start of making acomplaint about bank charges. Can I still make a complaint?
A: We’re always happy to send copy statements on payment of our service fee. If you have requested them they should be sent to you within 40 days of payment of this fee. However, you should note that if you then write to make a complaint about your bank charges this will be treated as set out above.
Q: Can I make a court claim for a refund during the test case?
A: Yes, but we will apply to the court to put your case on hold while the test case is running. This is because the issues being raised in customer complaints on unauthorised overdraft charges are being considered in the test case.
Q: Can I complain to the Financial Ombudsman Service about my bank charges?
A: The Financial Ombudsman Service (FOS) has decided not to review complaints about unauthorised overdraft charges while the test case is running. If you do complain to FOS, you will receive a letter explaining this and letting you know what will happen.
Q: What if I have already been made an offer?
A: We will stand by any offer to settle a complaint or court claim that we have already made to our customers. If you have received an offer to settle from us which is still outstanding we will be writing to you again shortly. Our letter will explain that customers have two months to decide whether to refuse our offer and wait for the decision in the test case. If you do choose to refuse an offer, and return the settlement amount to us, your complaint will be held and recorded by us until there is a final decision in the test case. We will then contact you again as soon as possible to finally resolve your complaint.
Q: I have already accepted an offer from you. Will my complaint be revisited?
A: If we have made a 'full and final settlement' which you have accepted, we believe it unlikely you would be awarded a further sum even if the test case indicates you could have claimed a potentially larger amount. However, accepting any such settlement does not stop you from asking for repayment on any further new charges incurred if the court finds they are unlawful.
Q: You’ve rejected my complaint, what can I do now?
A: You may wish to refer your complaint to the Financial Ombudsman Service. However as set out above, the Financial Ombudsman Service (FOS) has decided not to review complaints about unauthorised overdraft charges while the test case is running. If you do complain to FOS, you will receive a letter explaining this. In addition, you can also make a court claim for a refund during the test case. However we will be applying to the court to put your case on hold while the test case is running. This is because the issues being raised in customer complaints on unauthorised overdraft charges are being considered in the test case.
Q: How long will the test case take?
A: At this time it is too soon to give any exact timescales for a conclusion to the test case but it could go for more than a year. We have agreed with the OFT and the FSA to conduct the test case in an efficient, prompt and orderly way.
Q: How can you continue to charge what you do for these services when there is legal challenge?
A: We believe that our current account fees and charges are clear and represent a fair charge for a banking service that is valued by our customers. That is why we have worked with the other major UK banks and the OFT to start legal proceedings, which we believe will clarify the law in this area.
Q: Does this test case and the suspension of unauthorised overdraft claims apply to my credit card complaint?
A: No this test case and the suspension applies only to complaints about unauthorised overdraft charges and the law which applies to them.

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