Just like personal banking customers, many business banking customers are being charged unfair fees for the use of unathorised overdrafts, bounced cheques or failed direct debits.
Similarly to personal banking, if your business has been subject to these unfair fees you can reclaim business bank charges.
Banks in the UK are currently raking in billions of pounds each and every year through these penalty charges, and if your business has been incurring them then you may be entitled to reclaim thousands back in unfair bank charges.
Recent research by Business Moneyfacts has revealed that despite the 2002 Competition Commission investigation into unfair bank charges, there had still been a gradual increase in the fees imposed on small and medium-sized enterprises.
The cost of using unauthorised overdrafts has risen on all business bank accounts offered by the major High Street banks which has in turn helped the banks record their highest every profits last year.
‘There is a wide range of fees and charges associated with an unauthorised overdraft on a business current account. Charges can range from £4 to £30 per day or up to £30 per debit, a potentially costly mistake for any business to make,” said Lee Tillcock from Business Moneyfacts.
As opposed to Consumer Regulations, Business banking accounts are covered under ‘Common Law’, which ultimately means that there are a number of differences in what the banks can and cant do in comparison to personal bank accounts.
The charges that you may incur for the use of an unathorised overdraft or bounced cheque are technically a fee for breach of your account contract. However, according the the Law, the sum of these charges must reflect the actual costs incurred by the bank and can not exceed damages the bank may have suffered due to the breach of this contract.
It is commonly thought that the maximum charge that could be justified is about £2.50 whereas the charges are commonly about £30 per incident.
The process of claiming these charges back involves spending some time identifying and calculating (including interest) exactly what you are owed over the last 6 years of banking. Further reading on this can be made at http://www.pbaclaim.uk/
You can then send the bank a form letter of complaint claim which will detail the reasons why you believe these charges to be unlawful.
Should the bank refuses to refund your charges then you are faced with two options. firstly you can issue a claim in the Court and the second would be to refer the case to The Financial Service Ombudsman who has the ability to investigate the claim on your behalf and force the bank into paying a refund.
If this is something you dont feel confident doing yourself then there are a number of Claims Management Companies who will typically offer a ‘no-win-no-fee’ agreement, which means that you wont be charged unless your claim is successful.
The only two things that will ask of you: your bank statements from the last 6 years, (copies will do), and that your turnover is less than £1 million.
If you are a busy person and would rather spend your time building and managing your business rather than sitting in telephone queues, then engaging such a company may be sensible. Their commission is typically 25% plus VAT of whatever they recover in return for doing all the work.