It's been in the news recently that Trading Standards are investigating the matter of Bank Charges. As most people are all too aware, venturing into an unauthorised overdraft, or having a payment bounce incurs a charge of between £20 and £50. I have in the past have the bank reject a number of payments in one go and then charge me £150 in the process. Thus far I have had good success with a template that I wrote myself, this occassion is slightly different however, then bank actually saw fit to write to me and tell me that I was being charged, rather than to just take the money from my account. Do they believe this will make it more legally enforceable? Perhaps.

For anyone that is interested, the charges are punitive and so not, it is assumed, legally enforceable under current UK Legislation. I say that it is assumed because the banks have not yet let a case get as far as a courtroom, they have always settled. This, I suspect, is because the banks cannot afford to allow a legal precendent to be set. Bank charges provide a major form of income for them, there were recently figures published of the estimated profit made by banks on these charges alone. Whilst I cannot remember the exact figure, it was in the billions.

Below is a copy of the reply I sent to their letter, I have not replicated their letter here as I believe it to be a standard template and so will have been seen by many people in the UK.

Dear Sir/Madam,

I write in response to your letter dated 13 July 2007, in reference to account ****** ********. Firstly please allow me to thank you for contacting me (both by letter and by phone) with regard to my returned payments.

However there is still an issue that must be resolved, as your letter states HSBC has charged me a fee of £50.00. I would like to point out that this charge is punitive and so not legally enforceable under current UK legislation. I feel that in a court of law HSBC would struggle to show that this charge does not breach the Unfair Terms in Consumer Contracts Regulations 1999. Whilst HSBC's terms and conditions may state that these charges may be levied, it does not make it legal to do so.

As I believe HSBC is aware, it is not possible to sign away your statutory rights under any contract in the UK. As my recent account conduct will show my financial situation is currently very tenuous, this month has seen a great many payments leave my account. As HSBC must be aware, I have deposited some small amounts throughout the course of the month, however once in a while my outgoings do stretch beyond my incomings. I believe it would be both unfair and irresponsible of HSBC to worsen this situation by levying a charge for returned payments.

Whilst my relationship with HSBC has been good for the years that I have been banking with them, I will not hesitate to seek legal recourse in order to reclaim the amounts that have been removed from my account by HSBC. I have not authorised HSBC to take these fees. Although I apologise for venturing into an authorised overdraft, I believe strongly that should this case proceed to a court of law,

HSBC would encounter great difficulty in establishing a legal basis for such a large charge.

Thank you for your time, and I hope to hear from you very soon.

Yours sincerely

Ben Tasker


Whilst I am unable to write letters for other people (firstly I am not a lawyer, and secondly I have my time filled up with family and friends letters) I will offer some very basic advice. If you are thinking of writing a letter in relation to anything, get your basic facts correct and support them. You cannot simply state that something is illegal, you must show it to be so. It may mean reading a lengthy legal document, but in the end it is worth it. Additionally you will have increased your knowledge of the law.
    Secondly, dependant on the company you are contacting try to always send your post recorded delivery. With a corporation such as HSBC it is likely to be unnecessary, however in a situation when a company could try to ignore your claim, it would be easy (if unethical) to claim your correspondence was never received.
    Another major tip, is to keep all correspondence that you both receive and send in relation to the issue, you may need it later in a court or with an adjudicator. Had I not filed my letters from Tiscali I would have been unable to progress through adjudication.
    If you are unsure about the date a regulation or Law was passed, then either look it up or simply don't write a date. Whatever you do, do not guess, if you guess wrongly you will be deemed as incompetent and your claim is unlikely to be taken seriously.

Hopefully HSBC will see the error of their ways, and send me another "without prejudice" letter, but they have tried to ignore me before.

We shall see.