Please read this article here:-

Bank charges - where to now

Please be aware that it is only worth resisting a strikeout of your claim if you believe that you have a viable strategy for continuing your claim in court.  This means that you must have a winning argument.

I do not believe that there is any basis now for general refunds of bank charges merely on the basis that the charges themselves are excessive and therefore unfair.

If if this forms the basis of your case then you should consider letting the claim go.  If you have a claim in place and it is within the small claims limit then you might want to have a go anyway as you won't be risking any further loss.

However, there will be a hearing and you will have to go to court.

If you believe that the bank has somehow treated you with particular unfairness - over and above merely the level of charges then you may well have a basis for continuing your claim or even starting a new one.

Please post any questions on the main forum.  There are already discussions there about this issue.

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In respect of this template:- it is still a bit rough at the edges.  Although I completed most of it in November 2009, it still needs some refinement.

Do not use templates like this without fully understanding it.  The courts are wary and fed up with people who are relying merely on copied documents without knowing what they mean.

Your Bank Charges claim - a template to object to a strikeout:- 

Has the court ordered a strikeout of its own initiative of your bank charges claim?

Has the defendant asked the court to strikeout your bank charges claim?

Dear Sir/Madam

Claim ref :  XXXXX

Objection to application for stay to be lifted

Objection to application to strikeout my claim

I am the Claimant in the above claim for the return of bank charges.  This claim has been stayed in common with other similar claims.

1. span style="color: rgb(255,0,0)">The defendant bank has written to you to ask that my claim should be struck out
2. I wish to object to the lifting of the stay.
3. The defendant bank has asked for my claim to be struck out on the grounds that my claim is made under reg.6 of the Unfair Terms in Consumer Contracts Regulations 1999 because the Supreme Court decision of 25^th November 2009 held that reg.6 does not apply to bank charges.
4. My reasons for objecting to the lifting of the stay are that my claim is not brought under reg.6 of UTCCR.  It is brought under reg.5.  The Supreme Court made it clear in their judgment that they had not considered the position of bank charges under reg.5 and that the way might still be open to allow valid challenges to bank charges under reg.5.
5. Therefore the defendant’s grounds for seeking a strikeout have no relevance to my claim.

1. The court has ordered on its own initiative that my claim should be struck out within XXX days
2. The court has granted me an opportunity to object to its order
3.  I wish to object to the lifting of the stay.

4.      The court has ordered my claim to be struck out on the grounds that my claim is made under reg.6 of the Unfair Terms in Consumer Contracts Regulations 1999 because the Supreme Court decision of 25^th November 2009 held that reg.6 does not apply to bank charges.

5.      My reasons for objecting to this strikeout  are that my claim is not brought under reg.6 of UTCCR.  It is brought under reg.5.  The Supreme Court made it clear in their judgment that they had not considered the position of bank charges under reg.5 and that the way might still be open to allow valid challenges to bank charges under reg.5.

6.      Because reg.6 UTCCR has no relevance to my claim, it would not be in the interests of justice to prevent me from pursuing my claim under reg.5 as indicated by the Supreme Court.

My representations:-

I respectfully request that the court consider the following representations:-

The recent OFT litigation on bank charges against 8 banks.

It is respectfully pointed out to the court that the Supreme Court was very careful to say that their Lordship’s judgment did not “close the door on the OFT’s investigations and may well not resolve the myriad cases that are currently stayed in which customers have challenged [Bank Charges].” (para.61 of the Supreme Court judgment)

It is therefore submitted that it would be not correct to suggest that the Supreme Court judgment now formed an unassailable obstacle to my claim.  This clearly is not the view of the Supreme Court

Reg.5, Unfair Terms in Consumer Contracts Regulations 1999 – Unfair  Contracts

The bank account contract which I have with the defendant is unfair as described in reg.5 of the Unfair Terms IN Consumer Contracts Regulations 1999.

Reg.5 says:- A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

The current account contract was not individually negotiated because the defendant imposes its own standard terms and conditions on its customers and is not prepared to agree or to permit any individually agreed variations to the supplier/customer relationship.

There is no real consumer choice as there is no true competition between the UK High Street banks.  The standard terms and conditions which I was obliged to accept were broadly the same regardless of whichever bank I might have decided to contract with, and this was particularly the case in respect of the overdraft charges which they imposed.

The lack of competition amongst High Street banks has been the focus of concern by the Government and the OFT, and was even highlighted by Lady Hale in her judgment in the recent OFT litigation against 8 UK banks.  Indeed Lady Hale even suggested that the lack of competition was the cause of the present bank charges problems. (Par.93 of the Supreme Court judgment)

There is a significant imbalance in the parties' rights and obligations and this is to the detriment of the customer.

This can be seen at least in the following ways:-

The bank reserves itself the right to vary terms and conditions as it sees fit. 

·         These variations are imposed without discussion with the customer.

·         The customer has no choice other than to accept the imposition of new or varied terms or else to accept the contract as terminated.

·         The bank not only varies the banking contract because of business necessity such as to reflect an increased level of inflation or an increased bank base rate – but also to restructure a banking product or to raise interest rates beyond what is needed to maintain the status quo.  Such variations are to the prejudice of the customer.  It is submitted that such accumulated variations over a period of time add up to substantially a banking relationship which is wholly different to that which existed at the time the original contract was made and wholly different to expectations of either party (bank/customer) at the time the original contract was made.

·         It is submitted that such a wholesale restructuring if the banking contract should not be the intention nor the effect of a reserved right to vary terms and conditions from time to time.

There is lack of mutuality in the bank/customer relationship

·         There is no reciprocity so that the customer is not permitted to impose any contractual variations on the bank

·         The current account contract allows the bank to impose charges at a high rate in the event that the customer makes some error in the management of his account.  The bank will not accept any similar liability in the event that it makes a similar error in the management of the customer’s account

The bank reserves to itself a right to terminate the banking relationship at any time for any reason

·         There is no requirement of “reasonable cause” and the peremptory exercise of this contractual right is a frequent cause of future financial problems for many bank customers.

The bank reserves itself terminate any overdraft facility and to require repayment within a time schedule of its own choosing

·         There is no requirement of “reasonable cause” and the peremptory exercise of this contractual right is a frequent cause of grave financial problems for many bank customers.

It is submitted that the points listed above are all highly symptomatic of a want of good faith by the banks in the form and in the application of their standard form contract.

Furthermore, it is now common ground that the banks have chosen the system of high bank charges as their principle business model for funding “free in credit” banking for around 80% of their customers.  It is submitted that it is fundamentally unfair that those in financially in difficulty should be used as the funding source for others whose finances are in a more comfortable position and that this treatment of their poorer customers is not a matter of good faith.

Until the recent OFT litigation, the banks had failed to be transparent about their charges in that they had denied that cross-subsidy took place at all and had even attempted to suggest that their charges represented value for money by claiming that that the charges were informed by the administrative costs of dealing with insufficient funds situations.

It is submitted that this deceptive information was calculated to deny their customers a chance to judge whether they really were receiving value for money in respect of the charges they were being forced to pay.  The information was not given to their customer in good faith and was calculated to make them act to their own detriment.

It is submitted that any business which predicates its entire business model on the “mismanagement” of their financial affairs by a proportion of their clientele is not acting in good faith.

It is submitted that it was pointed out by the Supreme Court that other European Banks do not construct their business models upon the likelihood of mismanagement or failure of a high proportion of their customers.  It was pointed out that French banks, for example, levied their charges on the amount of transactions which were carried out.

It is submitted, therefore, that the business model of UK banks is not driven by necessity.  There are alternatives.  UK banks have voluntarily chosen to adopt a personal banking model which requires that the well-off are funded by the not-so-well-off.

UK bank profits over the last 4 years have averaged around £40bn each year.  The Supreme Court was told that bank charges produce about 30% of annual UK Bank revenue.

Once again it is clear that the present UK bank business model is not a survival model.  If the industry were to adjust their profit expectations to a level lower slightly lower than the present very substantial level, that they could afford

Consumer Credit Act 1974

S.140A imposes a requirement similar to re.5 UTCCR that where the dominant partner in a supplier/consumer relationship exercises his dominant power unfairly, that the contractual term in question will be invalid.

FSA – Banking: Conduct of Business Regs.2008

The new FSA regulations which are binding on banks require that they treat their customers fairly.  The FSA regulations are enforceable against the banks by means of substantial fines.

The FSA regulations are binding upon the banks

Assessment of fairness by the OFT.

Although the Supreme Court decision has prevent the OFT from applying any finding of unfairness for the purposes of the Unfair Terms in Consumer Contracts Regs 1999, such a finding will be highly probative of a breach of the banks obligations under the FSA regs and therefore their implied duty to act fairly under the banking contract.

The court’s own role in assessing the fairness of contractual terms

Court’s attention is respectfully drawn to the recent decision in Pannon GSM Zrt. v Erzsébet Sustikné Győrfi (Case C-243/08) were it was held that national's court of its own motion must determine whether the contract before it contains unfair terms. [Thank you to Stephen Hone for this input]

I therefore respectfully request that my claim is not struck out, that I be allowed to submit an amended particulars of claim and that the case then be listed for a hearing of the issues.

Yours sincerely 




[Your Name]

Copyright © Reclaim the Right Ltd - 2009, 2010

 You should ask for an urgent meeting with your bank to discuss your position.

Hand this letter and I/E schedule to the person you are meeting and talk them through it.

Make notes of what is said.  After the meeting, send a copy of this letter and the I/E schedule to the same branch addressed to the same person.  Also send a copy to the customer services department and say in a covering letter that you are confirming what you have told the branch.

You can also confirm what was said at the meeting - so "... Thank you for agreeing to help me ...." or " ...I am very disappointed that you have not agreed to comply with my notice of appropriation ..."

Make sure that you log everything in writing.  It will help you if you have to take action against the bank later.

You must have read the Appropriation FAQ here

You will need an Income/Expendture form.  There is one here

[your address]

[bank name & address]

[date]

NOTICE OF APPROPRIATION



Dear Sir/Madam,

ACCOUNT NUMBER: xxxxxxxxx


I am writing to you to give you formal notice that I am asserting my Right of Appropriation in respect of certain money which will be coming into my account.  Please see my attached income/expenditure schedule.

The reason I have to serve you with this notice is that I am presently on a reduced income, namely [I am on XXX benefits]  [reduced income while convalescing from an illness/injury][have just lost my job][explain problem]

I anticipate that I will be in this situation for about [xxx weeks/months]

This Notice of Appropriation is intended to be effective for [XXX period of time].  I will keep you updated of any change in my circumstances and in any event I will renew this notice in 3 months [or other period – not more than 3 months]

The Right of Appropriation entitles me to reserve as much of my income as is necessary to meet certain basic living expenses.  The bank is required by law to respect my appropriation of these funds even though it may mean that my subsistence expenses are prioritised over my debts to the bank – for instance bank charges.

If you have any doubt about this, please refer to your legal department or your line manager for guidance.  Please note that the Right of Appropriation does not only apply to income from benefits or tax credits.  The Right applies to any income regardless of source and which is necessary to cover subsistence expenses.

Please note that the Bank is obliged to act according to the law in all its dealings with my account.  The Bank is obliged to act in accordance with the Banking Code of Practice and also in accordance with the new FSA Banking: Conduct of Business Regulations which came in force 1^st November 2009.

As you can imagine, the subsistence expenses which are appropriated by this Notice are extremely important.  If the Bank ignores this Notice or refuses to comply in any way, I shall be obliged to seek immediate assistance in the County Court.

I would point out to you that the Bank has a duty under the new FSA regulations to enter into dialogue with me and to treat me fairly.  If you have any questions about this Notice or about my income/expenditure schedule, please contact me about the matter rather than taking some precipitative action.

Yours faithfully

Sign the Letter