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Last Updated: Wednesday, 27 June 2007, 00:29 GMT 01:29 UK
Suing the bank, again and again.
By Ian Pollock
Personal finance reporter, BBC News

Marc Gander
Banks continue to heap on the charges, says Marc Gander
A new elite class of bank customer is emerging - people who have successfully sued their banks for the return of overdraft charges not just once but two, three or even four times.

In the past year or so, the UK's banks have handed out millions of pounds to tens of thousands of customers who have demanded the repayment of these charges.

But despite conceding initial claims from customers, the banks continue to levy charges if the person fails to clear their unauthorised overdraft.

The result is a merry-go-round of continued legal action and repaid charges.

38,000 in claims

Stephanie, a physiotherapist from Manchester, has sued her bank HSBC three times now, receiving 18,000 in the process.

I imagine this time round it will be the end of our relationship

The bank paid up each time she threatened court action.

She is now suing the same bank for the return of more than 20,000 in charges levied on her business account.

"They are being deliberately obstructive now and won't provide us with the statements, so I shall take them to court for non-compliance with the data protection act," she says.

"I imagine this time round it will be the end of our relationship."

No one, apart from the banks, knows how many people have sued them more than once - and the banks are not saying.

"Anyone with their account still open is at risk of getting charges again - it's amazing the banks are still heaping them on," warned Marc Gander of the Consumer Action Group (CAG).

"The reason they are doing this is because they can never, ever, relinquish their position on this - that the charges are legal," he explained.

Closing accounts

Ending the relationship - in other words closing the account of the complaining customer - has not been uncommon.

Joanna Smith
Joanna Smith sued Lloyds TSB twice

Joanna Smith, from Northolt in West London, had her account closed suddenly last December, just after Lloyds TSB settled her second claim for a further 200.

The bank had already paid up on her first claim for 4,000 early last year.

In her case the extra charges had continued to accrue when it bounced some cheques and direct debit payments.

"I sued again because they were applying the same charges of which I originally complained," she explained.

"But they did not admit to doing anything wrong, they just decided to make a goodwill gesture," she said.

After a complaint to the Financial Ombudsman Service (FOS) the bank admitted it had been wrong to close her account without the 31 days required notice and offered her 75 in compensation.

A more recent tactic of some banks has been to tell customers that they will do this unless the person agrees to the bank's scale of fees and charges in the future.

"They are asking customers to agree never to sue again as part of a settlement," says Marc Gander.

"I think this is probably unenforceable," he said.


Marie-Laurence Pace told the BBC she had sued two different banks, twice each.

"I have pursued Halifax twice, the second time when they charged me 39 and 28 for going over my limit by 12 pence," she said.

Now they have the cheek to contact me saying if I don't pay the overdraft in seven days, they will send bailiffs in
Jason Burns, auxiliary nurse

"I also reclaimed from Barclays once, and am in the middle of a second action as they had levied more charges whilst my claim was ongoing, and refused to include those extra charges in their settlement."

Jason Burns, an auxiliary nurse, received 4025 from the NatWest in March this year for his first claim and is suing for a further 600 racked up since then.

"These current charges started life as a 38 charge for an unpaid direct debit for 9.99 for mobile phone insurance," he explained.

"On one day alone in May or June they charged me six times in one day, two charges of which was for 76 each, plus two lots of 38.

"Now they have the cheek to contact me saying if I don't pay the overdraft in seven days, they will send bailiffs in, take me to court and I will foot their legal costs for doing so," he said.

Why do the banks persist with what appears to be a charade?

"Banks believe arranged overdraft fees to be clear to customers," said the British Bankers' Association.

"Where possible banks would rather maintain relationships with customers and so may, on a case by case basis, offer gestures of goodwill."

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