As an MP I have become increasingly concerned that many people in Paisley and Renfrewshire North may have paid excessive penalty charges to their banks if they become overdrawn and wanted to provide some guidance for my constituents who may be entitled to reclaim this money.

This information pack gives a step-by-step guide to claiming back your bank account, credit card and store card penalty charges. We have also provided you with templates for form letters that you can send to your lender.

To download the information pack as a Word Document click here.

To download the information pack as a PDF file click here.

More information on reclaiming bank charges and other unclaimed finances can be found by clicking the button below:

Penalty charges can be incurred for the following: unauthorised overdrafts, unpaid items such as cheques, direct debits or standing orders. These are also known as returned or bounced items.

You can claim the last five years of charges.

Some lenders have threatened to close the accounts of people after they have claimed back their charges. This is rare and unlikely to happen but if you are worried you should open an account with another bank, just in case.

If you have all your statements from the past five years:

• Highlight all the penalty charges in your last five years of account statements.

• Add up the total and then fill in all the information on the document labelled ‘Calculated Charge Sample Letter'.

• Next, post this letter by Recorded Delivery, to the branch address of your bank/lender including a photocopy of the highlighted statement pages.

• The bank/lender will usually respond to the letter by either refusing to meet your claim or by offering to settle in part, or in full.

If the claim is small, the bank/lender may want to settle it quickly to reduce its legal and administration costs. If the claim is large, it is more likely the bank/lender will do nothing - waiting until you actually go ahead and file a claim at court.

Check online with the Post Office to confirm the date that the bank/lender received your letter and then allow 14 days from that date for it to respond. If, after 14 days, you have received no response at all, or are unhappy with the bank/lender's response then the next stage is to file a claim at your local Sheriff court (see section titled 'Filing a claim in the Sheriff Court' below). There is a fee to file a claim. If your bank pays up, this fee is refunded at the point of settlement.

The bank/lender is then obliged to defend its case before the Sheriff or else to pay the amount you are claiming against it. If it chooses not to defend itself, as well as paying the full amount of your claim, it will also refund your court fee. So far no bank/lender, we are aware of, has defended its penalty charges in court.

If you have only some statements from the past five years:

You can submit an estimated claim if you genuinely believe you have been charged during a period for which you have no statements. Calculate all the charges from the statements you have and if you believe the missing statements would also record similar charges, then estimate the missing amount by doing the following equation:

If one year's statements show £70 of charges then you can estimate the total amount of charges for 5 years will be: £70 x 5 = £350.00 If you have 5 months of statements and these show that you have accumulated £150 of charges in that time, then you can calculate that you have been charged on average £30 a month. (£150 divided by 5 = £30). There are 60 months in five years so 60 x £30 = £1,800.00 (if your account hasn't been open for the past five years then only multiply the average amount by the number of months the account has been open).

Fill in the necessary details in the template for the "Estimated Charges Sample Letter" and post it Recorded Delivery to your bank/lender's branch address.

Your bank/lender will almost certainly work out how many charges you have actually incurred in the past five years. It may contact you within 14 days to either make you an offer, in part or in full, or to state that it has refused to refund your money.

If the claim is small, banks/lenders tend to settle the claim quickly to reduce their legal and administrative costs, but each organisation reacts differently. If the claim is large, then it is more likely the bank/lender will do nothing until a claim is filed at court.

Check online with the Post Office to confirm the date that the lender received your letter and then allow 14 days from that date for it to respond. If, after 14 days, you have received no response at all, or are unhappy with the bank/lender's response then the next stage is to file a claim at your local Sheriff court (see section titled 'Filing a claim in the Sheriff Court' below). There is a fee to file a claim. If your bank pays up, this fee is refunded at the point of settlement.

The lender is then obliged to defend its case before the Sheriff or else to pay the amount you are claiming against it. If it chooses not to defend itself, as well as paying the full amount of your claim, it will also refund your court fee. So far no bank/lender we are aware of has defended its penalty charges in court.

What to do if you have no - or very few - bank records

Check to see how far back you can access your statements through your bank's or lender's website.

If all your statements are not available online, then phone the bank or lender to ask for the relevant information. You may be charged for this.

If the charge is more than £10 and you are unhappy to pay it, there is the option of submitting a Data Protection Act (DPA) disclosure request (see section below titled Data Protection Act disclosure request for further information).

When the statements arrive, follow the advice from the first section "You have all your statements from the past five years".

Data Protection Act Disclosure request

This request is made under the Data Protection Acts 1984 and 1998 and refers to the "right of subject access" under the acts.

Use the draft Data Protection Act letter in the pack as it has been written to avoid confusion and delay. Using the DPA route does delay the process of claiming back penalty charges by as much as 40 days. It is therefore a last resort.

Make a note of any calls you make and what the lender tells you. Also note when you post letters etc as this will make it much easier to keep track of everything.

Once the statements or charge details arrive, then follow the advice from the section entitled "You have all your statements from the past five years".

Filing a claim in the Sheriff Court

You need to fill out a Small Claim Summons document and take it to the Sheriff Court.

There will be a charge for filing the claim.

Guidance Notes on how to fill out the form can be found on the Scottish Courts WebSite at: http://www.scotcourts.gov.uk/sheriff/small_claims/guidance_notes.asp

Calculated Charge Sample Letter


[Your Address]


[Date]


[Your Bank Branch’s Address]



Dear Sir or Madam,

Regarding: [Your Account Number. Your Sort Code.]

Due to recent media coverage on bank charges I now believe that you, [your bank’s name] have been charging me charges that are contrary to the Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2 (e) of the said regulations gives a non-complete list of terms, which may be regarded as unfair, such as a term that requires me as a consumer who fails in his obligation, to pay a disproportionately high sum in compensation.

I believe that your charges are disproportionately high and therefore they are contrary to the Unfair Terms in Consumer Regulations 1999. In addition I believe that your charges are a Penalty. Penalty charges are irrecoverable at common law. The precedent for this was Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor co Ltd [1915] AC 79 along with Murray v. Leisure play [2005] EWCA Civ 963. It was held that a contractual party can only recover damages for an actual loss or liquidated losses. It is clear that your charges do not reflect any actual and or real loss.

Furthermore if you fail to comply with this letter, I request without further notice a breakdown and proof of all costs involved, in regards to your actual or liquidated losses involved in any breach of contract to which these charges relate with yourselves, and that these charges reflect your true costs in relation to the said charges, and are proportionate to the charges levied on my account as defined in Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2 (e).

Therefore I require you to refund me a total of £[XXX.XX], representing the total, unlawful amount charged during the last 5 years. I hereby give you 14 days to refund the charges back on to my account.

For the avoidance of doubt, if this is not done within 14 days, I will commence my claim in the courts without further warning. This action will inevitably involve you in additional costs. I also hereby request a detailed report of which clause in your terms and conditions each charge has been applied against.

Yours sincerely,

[Sign here]

[Print your name here]

Estimated Charges Sample Letter


[Your Address]


[Date]


[Your Bank Branch’s Address]


Dear Sir or Madam,

Regarding: [Your Account Number. Your Sort Code.]

Due to recent media coverage on bank charges I now believe that you, [your bank’s name] have been charging me charges that are contrary to the Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2 (e) of the said regulations gives a non-complete list of terms, which may be regarded as unfair, such as a term that requires me as a consumer who fails in his obligation, to pay a disproportionately high sum in compensation.

I believe that your charges are disproportionately high and therefore they are contrary to the Unfair Terms in Consumer Regulations 1999. In addition I believe that your charges are a Penalty. Penalty charges are irrecoverable at common law. The precedent for this was Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor co Ltd [1915] AC 79 along with Murray v. Leisure play [2005] EWCA Civ 963. It was held that a contractual party can only recover damages for an actual loss or liquidated losses. It is clear that your charges do not reflect any actual and or real loss.

I currently have my bank statements for the last [XX] months the charges during this period come to a total of £[XXX.XX]. Therefore I have estimated that over the last five years the total amount of charges you have applied to my account is £[XXX.XX]. Consequently I require you to refund me a total of £[XXX.XX], representing the total, unlawful amount charged during the last 5 years. If you disagree with this amount please supply me a copy of all the charges applied to my account dating back five years within the next 7 days.

I hereby give you 14 days to refund all the charges dating back five years on to my account, plus provide evidence that this is the total amount. For the avoidance of doubt, if this is not done within 14 days, I will commence legal proceedings without further warning. This action will inevitably involve you paying additional costs.

I also hereby request a detailed report of which clause in your terms and conditions each charge has been applied against.

Yours sincerely,

[Sign here]

[Print your name here]

Data Protection Act Disclosure Request Sample Letter


[Your Address]


[Date]


[Your Bank Branch’s Address]


Data Protection Act Disclosure Request


Dear Sir or Madam,

Regarding: [Your Account Number. Your Sort Code.]

Under the Data Protection Act 1984 and 1998, and including the right of subject access under these acts, please supply me with a complete list of transactions and charges relating to my bank account since [Insert month and year of five year period of your claim]. Alternatively a complete set of bank statements for that period will be acceptable.

Additionally where there has been any event in my account history over this period which has required manual intervention by any member of your staff or any other person, I require disclosure of any indication or notes which have either caused or resulted in that manual intervention or other evidence of that manual intervention in relation to my banking business with you.

If you are unable to supply data relating to manual intervention because there has been no such manual intervention then please confirm this in your response to this request.

I enclose the statutory maximum fee of £10. You have 40 days in which to comply. Furthermore, if I discover that you have levied disproportionate penalties against me then I shall be reclaiming them and also reclaiming the enclosed £10 DPA disclosure fee.

Furthermore, I am sure you are now aware due to the number of these letters you receive plus the massive media attention, that every time you receive one of these letters it will be followed up by a request for a full refund of any disproportionate penalty charges, this will give you 14 days to do so before court action. Please note, if I have to take court action to reclaim these charges then I will do so. Therefore, to save yourselves some time and money, you can refund all these charges dating back 5 years immediately and you will not incur the court fees or your solicitor’s fees.

Yours faithfully,

[Sign here]

[Print your name here]

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