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16 July 2007
Over recent years law firms that work on a contingency fee basis, which is a no win no fee basis, have been coming out of the woodwork, and the latest targets of these firms are banking customers that want to claim back unlawful overdraft charges from their banks.
An array of no win no fee law firms are now offering to claim back charges for banking customers that do not feel that they can conduct the process themselves, and they are charging around 25 percent of the amount reclaimed by way of a fee.
Banking customers in the UK have been claiming back these bank charges for some months now, following a ruling last year that deemed the charges unlawful and unfair.
This is because banks typically charge between £20 and £40 each time a customer goes over their overdraft limit and also for retuned cheques and direct debits. However, the cost to the bank for administration of such oversights is around £2 - £5, which means that they are making illegal profits from penalties.
Many customers have already claimed back thousands of pounds each in some cases from the UK's banks, but there are also many that have not made a claim.
These law firms are targeting those that have had charges applied to their accounts in the past six years and have not yet claimed them back.
However, experts are urging consumers to try and reclaim the money themselves rather than having to pay a hefty fee. In all but two cases the customers have been awarded the money if the case has had to go to court. However, the banks usually pay up before court action is taken.
However, according to the law firms there are people that could still benefit from the service. One official from such a firm stated: "If you are confident and have that kind of personality, then you can win it back yourself. However we think there's a reasonable niche market of people who don't want to have to issue a court summons or deal with it, and would rather have someone to hold their hand through the process."
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