How to reclaim

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  • Have you paid ridiculously high bank charges in the past when you only went overdrawn by a small amount, or perhaps you were sold payment protection insurance (PPI) for a loan and were given the wrong information about it? The good news is you can reclaim much of what you should never have paid out.

    Use our handy guide to reclaim money when you’ve been charged unfairly, plus information on how to know if you’ve been overcharged or are paying too much tax and what to do to get your money back.

    It’s not always simple – it can take months to get a final decision and you have to be prepared to do a little digging around. On the plus side, there are lots of success stories and it can be worth persevering. If you genuinely believe you’re owed money by banks, the tax man, insurance firms or your credit card company, you just need to get hold of the information and there could be a cheque in the post winging its way to you soon.

    Reclaiming unfair bank charges

    About bank charges: You might have been charged as much as £35 for going overdrawn or a bit less for bounced cheques or unpaid direct debits. Many of these fees have now dropped to around £15, but it depends on the bank.

    Am I entitled to a refund?
    If it was a one-off mistake (on your part) or an error on the bank’s part, contact your bank and they should refund you. However, if you’ve had lots of charges over a long time, you’ll have to write a letter. The three situations in which it’s easier to claim are these. Firstly, if you’re in financial hardship (e.g. struggling to pay for basics, disabled, spending a significant proportion of your income on repaying charges). Secondly, if the charges were ‘disproportionate’ so, as an example, you were charged £35 for going over your overdraft by just a couple of pounds. Thirdly, if you’re in a vicious circle of charges – new ones arriving before you’re able to pay back old ones.

    How do I reclaim bank charges?
    Initially, approach your bank. You’ll need to have evidence of your charges so find your old statements. If you don’t have them any more, see how many you can print off online or call or write to your bank and ask for your past transactions (don’t ask for statements as you may get charged per statement) although the bank may charge you a one-off £10 to see past transactions too.

    With the information, list all the charges (and why they were unfair) in a letter. You can claim back as far as you want, even if the account is closed. Many banks will reject your claim (and may mention a Supreme Court decision from 2009), but if it’s a genuine case, write back and say you’ll take it to the Financial Ombudsman or to court. Your local Citizens Advice Bureau can offer letter-writing tips, otherwise keep it simple and describe the effect of the charges on your financial situation. You can also include redundancy letters, debt letters etc.

    You’ll need to wait at least 8 weeks for a reply and if it’s rejected, go to the Financial Ombudsman Service. Calls are free (0800 023 4567 from a landline, 0300 1239123 from a mobile) and so is the service. There are no courts involved and you can send everything by post or online. The Ombudsman will liaise with the bank for you (but only after you’ve tried to settle it yourself first). As with the bank, when you send your details to the Ombudsman, write about what happened to you and don’t make it too formal. They will take up your case and decide if you are owed money.

    Getting a tax rebate

    About your tax code: You might not even know your tax code, but those numbers tell your employer how much tax to take from your salary so it’s important to be on the right tax code.

    Am I entitled to a refund? If you’ve got your income details, you can use the HMRC’s (Revenue & Customs) Tax Checker to see how much tax you should be paying. If you’ve overpaid, you could be on the wrong code. Sometimes, you’re on a tax code from a previous job where you may have had certain benefits such as medical insurance. To stay on the right code, always contact HMRC every time your circumstances change – new job, more money, benefits etc.

    How do I reclaim overpaid tax? First, find your tax code – it’s on your payslip or any P45s. Remember, different jobs or sources of income have different codes, so if you have more than one job, they may have different codes. A quick way of understanding the code is that the number refers to how much you can can earn in a year without paying tax on it (your personal tax-free allowance) and the letter is linked to your age, tax circumstances and other factors. Find out more here.

    To check if you’re paying the right amount, find out your personal allowance and factor in any deductions – that means money you make where you don’t pay tax ‘at source’ i.e. it is not automatically deducted from your earnings. This could be extra money from renting out a property or any self-employed income. Subtract this from from your tax allowance and what’s left is the tax-free income income you’re allowed that year. If your personal allowance is the standard £8,105, your tax cod will be 810 (HMRC removes the last number). The letter in the code depends on your personal situation. If you think you have the wrong code, call HMRC on 0845 300 0627 (8am-8pm Monday to Friday or 8am-4pm on Saturdays). They’ll ask you for details and send you a rebate if you have overpaid.

    Payment Protection Insurance (PPI)

    About PPR: PPI is Payment Protection Insurance, which protects your loan, credit or store card payments in the event of accident or sickness (in some cases, unemployment too). Some policies are valid, but it was also mis-sold as sales people did not explain the terms. As a result, many people ended up with protection that didn’t offer any cover e.g. if they were self-employed or had certain medical conditions.

    Am I entitled to a refund? Yes, if you think you were mis-sold PPI. It’s easier if you took out the insurance in the last 6 years or, if it was before that, that you paid it off in the last 6 years. If it was a loan, find out what your monthly loan payment should have been – how much you borrowed, for how long and the interest charged. If the actual repayments were more, chances are you were also paying PPI.

    How do I reclaim mis-sold PPI? You can do this yourself so don’t be tempted to go via a ‘no-win, no-fee’ agent. The Money Advice Service has an excellent letter template which you can use to send to your loan or credit/store card company or whoever you bought the policy from.
    If your claim is rejected, the next step is to call the free Financial Ombudsman Service on 0800 0234 567 (0300 1239 123 from mobiles) – make sure you contact them within 6 months of your rejection letter. They will then follow up for you at no cost to you.

    Credit card charges

    About credit card charge: Similar to banks, many credit card providers were charging fees of up to £35 for late payments or going over the credit limit. There was a ruling in 2006 by the Office of Fair Trading that the charges were unfair and charges are now around £12. Obviously the best way to avoid these is to always pay off your monthly payment in full by setting up a direct debit. If you do have outstanding debts, switch to a 0% interest-free credit card just to give you some breathing space.

    Am I entitled to a refund? If you were charged £35 because you went over your limit by a few pounds, you have a strong case for reclaiming these charges as it doesn’t actually cost banks that much to send you a letter to tell you that. If you’ve got several charges like this over the last 6 years, you should be able to reclaim the difference between that fee and the £12, although you should always ask for the full amount.

    How do I reclaim credit card charges? Write to your credit card company with details of the charges. If you don’t have all your old statements, they may charge you £10 to see past transactions, but make it clear you want a list of transactions, not statements, as they can cost more. You can also ask for 8% interest on the money you’re owed, so request that as well. Companies have 40 days to reply to you.

    If your claim is rejected, you could threaten court action as it can sometimes result in a quicker pay-out but otherwise, contact the Financial Ombudsman Service 8 weeks after your first letter. It’s a free service and calls are free too – 0800 0234 567 (0300 1239 123 from mobiles). Send them the list of charges and they can then take it up for you at no cost to you. You should also inform the Ombudsman if your credit card has been de-activated by the card company as a way to put you off.

    Where to next?
    Get more information, letter templates and more from
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