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Step by step guide.
The Step By Step Guide
Step 1 – Set up a new bank account
I have heard that some banks could close down your account once they pay out the cash. This is quite extreme since you will probably make them more money in the long run, but for the more cautious, this may is advised.
Lloyds TSB
www.lloydstsb.com/current_accounts.asp?link=top_navigation
The Royal Bank of Scotland
www.rbs.co.uk/Personal_Finances/Current_Accounts/default.htm
Alliance and Leicester
www.alliance-leicester.co.uk/currentaccounts
Barclays
www.barclays.co.uk/currentaccount-index
Halifax
http://www.halifax.co.uk/home/home.asp
N.B If you want a savings account I would recommend Lloyds TSB currently doing 8%…this is better than the Post Office and many cash ISA’s at present. (This is where my £914 is going)
Step 2 – Work out Your Total Charges (Letter 1)
You can claim back fines from up to six years previously. (Most Internet banking facilities only show two previous years). Write to your bank’s data protection dept. requesting your statements for the last 6years. They have 40 days maximum to send you your details, however they can charge a maximum admin fee of £10, so enclose a cheque for this sum…half of the time it will not be cashed anyway.
Highlight all charges incurred to your account where you have gone overdrawn without previously arranging it with them.
Download letter 1
Download Address List – Where to write to
Step 3 – Write to your local branch (Letter 2)
Once you have highlighted the charges you think you are owed, photocopy and keep a copy for your own records. Send a copy to your local bank (with letter 2 filled in)
****Don’t forget you can also ask for the interest you would have been paid back, statutory interest rates in a court of law are around 8%, over 6years that’s a lot of money****
**e.g. £30 earns around £14 today**
Note: asking for the interest may make them more willing to settle, but if it is too much then they may threaten to take it to court. Tread carefully… many people get it all back, I decided to settle for somewhere in between the rate with and without interest.
Download Letter 2
The outcome will be one of three
1). You get all of your charges back You get all your money back. For a rare few, the bank will simply write back and offer to pay you the money. If this happens, congratulations.
2). You get a partial offer There is a chance it’ll offer some or all of the money you want. If so, you need to decide whether it’s worth continuing or just taking the cash. Perhaps write back once more, ask for a little more then accept?!
3). The bank ignores you or writes back saying they think that the charges are legal The most common outcome is that you get a letter explaining that the charges are lawful, and that you don't know what you're talking about; or even that it is prepared to fight. The banks are trying many techniques to put you off continuing. It may even tell you it’s sorry to hear you’ve got a complaint and it’s looking into it.
If 2 or 3 occurs decide whether you wish to accept this…Please Bare In Mind The Bank Can Close Your Account (hence why you took STEP 1)
Outcomes 2 or 3 are expected from the bank as this will deter quite a few people… (which will save them money)
If the jist of the response is “Sorry You Are Not Having The Money” press on to STEP 4
Step 4 – Threaten to take it to court (Letter 3a & Letter 3b)
If your enquiry was rejected, deemed invalid or you didn't receive a response, write to inform it that you’ll be taking court action if it doesn’t settle. In many ways this is a repeat of step three, but in more militant fashion. Include a strict limit of the time you give it to respond. Some people skip this step, but it’s often worth a shot, as if it works it saves actually having to start the court process.
As an option, if you want a speedy settlement, one tactic is to offer the bank the option of settling for a lower amount if it pays out now. How much lower depends on you, but 25% less is a good rough guidance. There’s no need to do this, it’s your choice, though if you choose to the letter below is drafted to help.
Do note the phrase ‘without prejudice’ it’s crucial. It means that the offer isn’t binding or admissible in any further legal process.
We feel you are within your rights, write back using
Letter 3a with interest
Letter 3b without interest
Hopefully this should now be the end of the matter!
(You’re welcome)
Step 5 Take the Bank To Court
If done correctly this is a very simple process and can be done online if needed. The bank will be unlikely to contest your case for the aforementioned reasons.
However, you are taking a bank to court, do not take this too lightly!!
It’s all about the Small Claims rules In a standard court, the losing party may be asked to pay the legal costs of the winners. This can be very expensive, yet if a case is heard under the ‘small claims’ system in the vast majority of cases, costs are not awarded, making it a much less risky bet.
Small claims in England and Wales are cases under £5,000, that’s before any statutory interest is added; those asking for more than that may want to consider lowering the asking amount (even if your earlier letters demanded more) to minimise the risk. If you have a very large claim, you can still go for it, though consider seeking legal advice.
For those in Scotland and Northern Ireland, while the law is similar, the small claims process works differently. In Scotland the maximum claim is £750 and you may only reclaim 5 years' charges, in Northern Ireland the maximum claim is £2,000. This article is written based on the process for England and Wales.
As a technical note, while it’s rare with these cases, submitting a claim for no more than £5,000 doesn’t guarantee it’ll be heard as a small claim; if it’s contested and seen as a difficult case, it can be tried in the county court as a non-small claim (on what are called the ‘fast track ‘ or the ‘multi track'), which could imply costs, though this is very rare.
Try www.moneyclaim.com for a helping hand.
What happens next
After you’ve submitted a Moneyclaim, what happens next depends on the Bank’s reaction. It takes five days for the claim to be ‘serviced’ and all deadline dates start from that point.#
VICTORY. The bank settles in full. For the sake of expediency the bank may settle in full as a ‘goodwill gesture’, including interest and court fees; though it almost certainly won’t admit it ever did anything wrong. This is most common for smaller claims.
VICTORY. The bank does nothing. This is a very common outcome; often the bank simply doesn’t acknowledge the claim and this means you automatically win by default after 14 days. At that point, you must request ‘judgment by default’, this can be done online, and you should do it as soon as possible (get it in your diary and plan around it to the second if possible) after the 14 days ends.
VICTORY. The claim’s acknowledged but there’s no defence. Banks have 14 days to acknowledge a claim, if that’s done they have a further 14 days to respond and enter a defence. Commonly they do an acknowledgement, but no defence is entered. Again this means you win, though this time after 28 days. At that point, immediately request a ‘judgment by default’, this can be done online.
EVEN IF IT DEFENDS THE CLAIM, DON'T WORRY. If you’re one of the few cases where the bank does enter a defence, don’t worry too much, this is pure posturing and in almost every case is simply a way to try and make you settle, or argue that you've asked for too much (e.g. you've gone beyond six years or tried to claim compound rather than statutory interest).
At this point you’re now in the Court process. There’s a straightforward form called the Court Allocation Questionnaire which you need to fill out and return to Court. The next stage should be a Small Claims hearing date, yet this virtually never happens, as the banks tend to offer a settlement at this stage.
Sadly, when the banks don’t defend a claim, they don’t always pay up automatically even though they’ve lost. Whilst mention of bailiffs isn’t normally the most cheerful subject on this site, let’s happily make an exception. If the bank doesn’t pay, you’ve a right to send the bailiffs in to claim the money; a number of people have exercised this option,
Make sure you take a video camera, I’m sure www.youtube.com would love this one!!!
Step 1 – Set up a new bank account
I have heard that some banks could close down your account once they pay out the cash. This is quite extreme since you will probably make them more money in the long run, but for the more cautious, this may is advised.
Lloyds TSB
www.lloydstsb.com/current_accounts.asp?link=top_navigation
The Royal Bank of Scotland
www.rbs.co.uk/Personal_Finances/Current_Accounts/default.htm
Alliance and Leicester
www.alliance-leicester.co.uk/currentaccounts
Barclays
www.barclays.co.uk/currentaccount-index
Halifax
http://www.halifax.co.uk/home/home.asp
N.B If you want a savings account I would recommend Lloyds TSB currently doing 8%…this is better than the Post Office and many cash ISA’s at present. (This is where my £914 is going)
Step 2 – Work out Your Total Charges (Letter 1)
You can claim back fines from up to six years previously. (Most Internet banking facilities only show two previous years). Write to your bank’s data protection dept. requesting your statements for the last 6years. They have 40 days maximum to send you your details, however they can charge a maximum admin fee of £10, so enclose a cheque for this sum…half of the time it will not be cashed anyway.
Highlight all charges incurred to your account where you have gone overdrawn without previously arranging it with them.
Download letter 1
Download Address List – Where to write to
Step 3 – Write to your local branch (Letter 2)
Once you have highlighted the charges you think you are owed, photocopy and keep a copy for your own records. Send a copy to your local bank (with letter 2 filled in)
****Don’t forget you can also ask for the interest you would have been paid back, statutory interest rates in a court of law are around 8%, over 6years that’s a lot of money****
**e.g. £30 earns around £14 today**
Note: asking for the interest may make them more willing to settle, but if it is too much then they may threaten to take it to court. Tread carefully… many people get it all back, I decided to settle for somewhere in between the rate with and without interest.
Download Letter 2
The outcome will be one of three
1). You get all of your charges back You get all your money back. For a rare few, the bank will simply write back and offer to pay you the money. If this happens, congratulations.
2). You get a partial offer There is a chance it’ll offer some or all of the money you want. If so, you need to decide whether it’s worth continuing or just taking the cash. Perhaps write back once more, ask for a little more then accept?!
3). The bank ignores you or writes back saying they think that the charges are legal The most common outcome is that you get a letter explaining that the charges are lawful, and that you don't know what you're talking about; or even that it is prepared to fight. The banks are trying many techniques to put you off continuing. It may even tell you it’s sorry to hear you’ve got a complaint and it’s looking into it.
If 2 or 3 occurs decide whether you wish to accept this…Please Bare In Mind The Bank Can Close Your Account (hence why you took STEP 1)
Outcomes 2 or 3 are expected from the bank as this will deter quite a few people… (which will save them money)
If the jist of the response is “Sorry You Are Not Having The Money” press on to STEP 4
Step 4 – Threaten to take it to court (Letter 3a & Letter 3b)
If your enquiry was rejected, deemed invalid or you didn't receive a response, write to inform it that you’ll be taking court action if it doesn’t settle. In many ways this is a repeat of step three, but in more militant fashion. Include a strict limit of the time you give it to respond. Some people skip this step, but it’s often worth a shot, as if it works it saves actually having to start the court process.
As an option, if you want a speedy settlement, one tactic is to offer the bank the option of settling for a lower amount if it pays out now. How much lower depends on you, but 25% less is a good rough guidance. There’s no need to do this, it’s your choice, though if you choose to the letter below is drafted to help.
Do note the phrase ‘without prejudice’ it’s crucial. It means that the offer isn’t binding or admissible in any further legal process.
We feel you are within your rights, write back using
Letter 3a with interest
Letter 3b without interest
Hopefully this should now be the end of the matter!
(You’re welcome)
Step 5 Take the Bank To Court
If done correctly this is a very simple process and can be done online if needed. The bank will be unlikely to contest your case for the aforementioned reasons.
However, you are taking a bank to court, do not take this too lightly!!
It’s all about the Small Claims rules In a standard court, the losing party may be asked to pay the legal costs of the winners. This can be very expensive, yet if a case is heard under the ‘small claims’ system in the vast majority of cases, costs are not awarded, making it a much less risky bet.
Small claims in England and Wales are cases under £5,000, that’s before any statutory interest is added; those asking for more than that may want to consider lowering the asking amount (even if your earlier letters demanded more) to minimise the risk. If you have a very large claim, you can still go for it, though consider seeking legal advice.
For those in Scotland and Northern Ireland, while the law is similar, the small claims process works differently. In Scotland the maximum claim is £750 and you may only reclaim 5 years' charges, in Northern Ireland the maximum claim is £2,000. This article is written based on the process for England and Wales.
As a technical note, while it’s rare with these cases, submitting a claim for no more than £5,000 doesn’t guarantee it’ll be heard as a small claim; if it’s contested and seen as a difficult case, it can be tried in the county court as a non-small claim (on what are called the ‘fast track ‘ or the ‘multi track'), which could imply costs, though this is very rare.
Try www.moneyclaim.com for a helping hand.
What happens next
After you’ve submitted a Moneyclaim, what happens next depends on the Bank’s reaction. It takes five days for the claim to be ‘serviced’ and all deadline dates start from that point.#
VICTORY. The bank settles in full. For the sake of expediency the bank may settle in full as a ‘goodwill gesture’, including interest and court fees; though it almost certainly won’t admit it ever did anything wrong. This is most common for smaller claims.
VICTORY. The bank does nothing. This is a very common outcome; often the bank simply doesn’t acknowledge the claim and this means you automatically win by default after 14 days. At that point, you must request ‘judgment by default’, this can be done online, and you should do it as soon as possible (get it in your diary and plan around it to the second if possible) after the 14 days ends.
VICTORY. The claim’s acknowledged but there’s no defence. Banks have 14 days to acknowledge a claim, if that’s done they have a further 14 days to respond and enter a defence. Commonly they do an acknowledgement, but no defence is entered. Again this means you win, though this time after 28 days. At that point, immediately request a ‘judgment by default’, this can be done online.
EVEN IF IT DEFENDS THE CLAIM, DON'T WORRY. If you’re one of the few cases where the bank does enter a defence, don’t worry too much, this is pure posturing and in almost every case is simply a way to try and make you settle, or argue that you've asked for too much (e.g. you've gone beyond six years or tried to claim compound rather than statutory interest).
At this point you’re now in the Court process. There’s a straightforward form called the Court Allocation Questionnaire which you need to fill out and return to Court. The next stage should be a Small Claims hearing date, yet this virtually never happens, as the banks tend to offer a settlement at this stage.
Sadly, when the banks don’t defend a claim, they don’t always pay up automatically even though they’ve lost. Whilst mention of bailiffs isn’t normally the most cheerful subject on this site, let’s happily make an exception. If the bank doesn’t pay, you’ve a right to send the bailiffs in to claim the money; a number of people have exercised this option,
Make sure you take a video camera, I’m sure www.youtube.com would love this one!!!