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frequently-asked questions

complaints about bank charges

what's happened with complaints about unauthorised overdraft charges?

The Financial Ombudsman Service - and courts across the country - put individual complaints about unauthorised overdraft charges on hold, while waiting for an important legal "test case".

The previous financial services regulator, the Financial Services Authority (FSA) also agreed that banks could suspend their work on complaints about these charges, until the "test case" decision was made.

The Supreme Court issued its decision on the "test case" on 25 November 2009. The Court made a unanimous ruling on the issues on which the Office of Fair Trading (OFT) had sought a decision.

The Court ruled that the fairness of unauthorised overdraft charges could not be challenged on the basis proposed by the OFT. The OFT has since announced that it will not make a further legal challenge on any new grounds.

In 2009, we wrote to the major current-account providers [letter opens in PDF] and claims-management companies [letter opens in PDF] to set out our approach to cases involving current account-charges and financial hardship – and to ask for cooperation in ensuring the efficient handling of these complaints.

can the ombudsman still look into complaints about bank charges?

The ombudsman has to take the law into account when we decide cases. So we considered the Supreme Court's decision - and its implications - very carefully.

Our view is that the legal ruling means we are not generally able to help with cases that involve "template" or "standard letter" complaints about unauthorised overdraft charges.

But in keeping with our usual approach to complaints that are referred to us, we will review each case individually - to see whether there are any one-off circumstances that may apply. For example, we would expect current-account providers to deal positively and sympathetically with a consumer in financial hardship - including where bank charges had added to their difficulties.

what about complaints that involve bank charges as well as financial hardship problems?

If you are in genuine financial hardship, this does not affect the legality of the charges. But it is relevant to how your bank or building society treats the amount you owe. Give them the necessary information about your financial circumstances to enable them to consider your situation fully.

If your bank or building society agrees that you are experiencing financial hardship, they should suggest an appropriate settlement. This may or may not involve reducing the amount you owe - depending on the circumstances.

If you're not happy with your bank or building society's response to an official complaint, we can look to see if we are able to help.

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