or the past 6 years. It would also destroy their fee charging structures, which is thought to be no more than a profit generating mechanism. Last year these penalty charges netted the banks ?4.5bn in profits. Rather than risk this in law, the banks have been repaying customers who complain, without admitting liability.

However, the banks are not simply refunding everyone. They wait until court proceedings have been issued against them by a customer before paying, in the hope that many will not see the 'procedure' through and drop their claims. I

Banks in the UK are creaking under the strain. They are being bombarded by demands from thousands of angry customers reclaiming all charges taken from them by the banks over the last 6 years. This all follows a case last year when a customer took a bank to court to claim back these bank charges. The bank failed to appear at court to defend the claim and the court ordered the bank to refund him all the charges. The story soon spread and has mushroomed into a media frenzy on the subject, as thousands of customers join the revolt.

The mass media coverage has also led to The Office of Fair Trading (OFT) to launch an investigation into the level of bank charges. In April 2006 the OFT ordered credit card companies to reduce their charges for late payments and over limit fees to a maximum of ?12.

The original court case against the banks was taken by a solicitor. He claimed that the charges levied by the bank constituted a financial penalty which is unlawful in the UK for non-negotiated contracts. This relates to a 1915 law. The terms and conditions of an account form a non-negotiated contract. Under the law, banks are only allowed to reclaim their actual financial loss in relation to a breach of contract. This means if a customer goes into an overdraft situation, and the banks send out a computer generated letter, they are only allowed to claim the cost of producing and posting this letter. Banks generally charge ?28-?40 for such breaches. They often apply this same charge every day that someone remains overdrawn and for every cheque and direct debit they do not pay during this same period. These charges are widely thought to be disproportionate to the bank's actual cost of managing the overdraft, and therefore represent a penalty which is unlawful.

UK law allows anyone to claim through the courts all monies owed to them for a period of six years. Although the banks have defended their charges to the media, they have yet to defend a court action against them. This is because they would have to clearly demonstrate in court the actual financial loss incurred for each charge they apply. If a case was found against them, they would be forced to repay all charges to all customers for the past 6 years. It would also destroy their fee charging structures, which is thought to be no more than a profit generating mechanism. Last year these penalty charges netted the banks ?4.5bn in profits. Rather than risk this in law, the banks have been repaying customers who complain, without admitting liability.

However, the banks are not simply refunding everyone. They wait until court proceedings have been issued against them by a customer before paying, in the hope that many will not see the 'procedure' through and drop their claims. I

verage has also led to The Office of Fair Trading (OFT) to launch an investigation into the level of bank charges. In April 2006 the OFT ordered credit card companies to reduce their charges for late payments and over limit fees to a maximum of ?12.

The original court case against the banks was taken by a solicitor. He claimed that the charges levied by the bank constituted a financial penalty which is unlawful in the UK for non-negotiated contracts. This relates to a 1915 law. The terms and conditions of an account form a non-negotiated contract. Under the law, banks are only allowed to reclaim their actual financial loss in relation to a breach of contract. This means if a customer goes into an overdraft situation, and the banks send out a computer generated letter, they are only allowed to claim the cost of producing and posting this letter. Banks generally charge ?28-?40 for such breaches. They often apply this same charge every day that someone remains overdrawn and for every cheque and direct debit they do not pay during this same period. These charges are widely thought to be disproportionate to the bank's actual cost of managing the overdraft, and therefore represent a penalty which is unlawful.

UK law allows anyone to claim through the courts all monies owed to them for a period of six years. Although the banks have defended their charges to the media, they have yet to defend a court action against them. This is because they would have to clearly demonstrate in court the actual financial loss incurred for each charge they apply. If a case was found against them, they would be forced to repay all charges to all customers for the past 6 years. It would also destroy their fee charging structures, which is thought to be no more than a profit generating mechanism. Last year these penalty charges netted the banks ?4.5bn in profits. Rather than risk this in law, the banks have been repaying customers who complain, without admitting liability.

However, the banks are not simply refunding everyone. They wait until court proceedings have been issued against them by a customer before paying, in the hope that many will not see the 'procedure' through and drop their claims. I

t. Under the law, banks are only allowed to reclaim their actual financial loss in relation to a breach of contract. This means if a customer goes into an overdraft situation, and the banks send out a computer generated letter, they are only allowed to claim the cost of producing and posting this letter. Banks generally charge ?28-?40 for such breaches. They often apply this same charge every day that someone remains overdrawn and for every cheque and direct debit they do not pay during this same period. These charges are widely thought to be disproportionate to the bank's actual cost of managing the overdraft, and therefore represent a penalty which is unlawful.

UK law allows anyone to claim through the courts all monies owed to them for a period of six years. Although the banks have defended their charges to the media, they have yet to defend a court action against them. This is because they would have to clearly demonstrate in court the actual financial loss incurred for each charge they apply. If a case was found against them, they would be forced to repay all charges to all customers for the past 6 years. It would also destroy their fee charging structures, which is thought to be no more than a profit generating mechanism. Last year these penalty charges netted the banks ?4.5bn in profits. Rather than risk this in law, the banks have been repaying customers who complain, without admitting liability.

However, the banks are not simply refunding everyone. They wait until court proceedings have been issued against them by a customer before paying, in the hope that many will not see the 'procedure' through and drop their claims. I

ortionate to the bank's actual cost of managing the overdraft, and therefore represent a penalty which is unlawful.

UK law allows anyone to claim through the courts all monies owed to them for a period of six years. Although the banks have defended their charges to the media, they have yet to defend a court action against them. This is because they would have to clearly demonstrate in court the actual financial loss incurred for each charge they apply. If a case was found against them, they would be forced to repay all charges to all customers for the past 6 years. It would also destroy their fee charging structures, which is thought to be no more than a profit generating mechanism. Last year these penalty charges netted the banks ?4.5bn in profits. Rather than risk this in law, the banks have been repaying customers who complain, without admitting liability.

However, the banks are not simply refunding everyone. They wait until court proceedings have been issued against them by a customer before paying, in the hope that many will not see the 'procedure' through and drop their claims. I

or the past 6 years. It would also destroy their fee charging structures, which is thought to be no more than a profit generating mechanism. Last year these penalty charges netted the banks ?4.5bn in profits. Rather than risk this in law, the banks have been repaying customers who complain, without admitting liability.

However, the banks are not simply refunding everyone. They wait until court proceedings have been issued against them by a customer before paying, in the hope that many will not see the 'procedure' through and drop their claims. In the meantime, and until they either try to defend a court action and lose, or the OFT force them to reduce their charges, they continue to levy them on probably the most needy people who are already finding it difficult to manage their money.