Bank account - terms & conditions

When you get a bank account, it’s really important that you read the terms and conditions very carefully, and that you understand them. If you want any advice or are unsure about anything, you should contact your local Citizens Advice Bureau. You can find your nearest office on the Citizens Advice Scotland website.

What are bank charges?

Banks will charge customers penalty fees for a variety of things. These include:

• Becoming overdrawn without permission
• Having a cheque ‘bounce’
• Failed direct debits

Often these charges are quite high, and don’t actually reflect what it costs the bank to process these transactions. For example, a bank might charge you £25 for having a cheque bounce, when the cost to them is actually closer to £3.

The Office of Fair Trading (OFT) had said that many of these charges are unfair, and many people have successfully claimed the charges, and interest, back from the banks.

Why should I reclaim my bank charges?

The OFT had said that any charge over £12 is automatically unfair, and many charges do not reflect the real cost to banks. While it’s important to manage your own money efficiently, these bank charges can often cause further problems for people struggling to stay out of debt.

How do I reclaim my bank charges?

The system in Scotland is different from the rest of the UK. In Scotland, you can reclaim the last five years worth of charges, and this is done through a small claims (Sheriffs) court.

If you aren’t sure how many charges you’ve accumulated, you can get your bank statements from the bank under the Freedom of Information Act. The bank should charge you no more than £10 for this. Write to your bank, requesting your statements under the Freedom of Information Act. If you don’t get a response from the bank within 40 days, you can lodge a complaint with the Scottish Information Commissioner (Scottish Information Commissioner website).

Once you’ve calculated how much you’ve been charged, your first step is to write a letter to the bank. Include the amount that you think you are entitled to.

Many people have received large sums of bank charges back, however in November 2009 a Supreme Court test ruling has made it more difficult to re-claim charges.

You will now need to prove that you are in hardship as a result of the charges. For those who are in hardship there is still a risk-free , cost-free process which could see money coming back.