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Advice for friend

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My friend has been trying to reclaim bank charges from Lloyds TSB.


They didnt reply to initial approach for repayment. She then wrote Letter before Action and they lodged £600 as a 'good will gesture' into her account, but would not pay anymore.


I am thinking that she should go straight to the online Money claim now. Is that correct? Does she need to do a new approach for the revised amount?



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She has already sent her letter before action so is OK to carry on with the money claim; I would also write to LTSB ( recorded delivery & keep a copy ) stating that the money lodged in her account has not been accepted as settlement of the dispute; it is a partial payment on what she is owed.

She needs to be well prepared if it does go to c. court though - see story below:


Bank's overdraft charges upheld


Lloyds TSB has become the first bank to win a charges case

Lloyds TSB has become the first bank to win a court case after being sued by a customer for imposing supposedly unfair overdraft penalty charges.

District Judge Cooke, at Birmingham County Court, dismissed a claim for £2,545 from Kevin Berwick.

Mr Berwick argued Lloyds TSB's charges for having an unauthorised overdraft were illegal contractual penalties.

But Judge Cooke decided the bank's charges were in fact legitimate fees for servicing an overdrawn account.

As such, the judge said they were legal.

"Having held that the charges complained of are not charges for breach of contract but part of the price of the services provided by the bank....he has not satisfied me that he has any ground in law for recovering from the bank the amount of any charges which he has paid to it," he said.

Lloyds TSB said it was pleased with the ruling.

"It appears to acknowledge our position in respect of current account service charges," said a spokeswoman.

"The court has agreed with us that these are charges for a service and not default or penalty fees as has been argued by others," she added.

Blow to claimants?

As this judgment has come from a district judge, it is not binding on any other court, in the way that a High Court judgment might be.



Approved judgement [424KB]

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Was victory an accident?

However, as the first judgment of any kind in this sort of case, it could be a blow to the hundreds of thousands of people who are still trying to claim that they have been overcharged by their banks for running unauthorised overdrafts.

So far, many claimants have been successful because their banks have settled their cases before the issue came before a judge, precisely in order to avoid an adverse legal decision.

Now, the first decision in which a judge has given an opinion on the law has gone in a bank's favour.

Marc Gander, of the Consumer Action Group, a leading bank charges campaign, said he was very disappointed.

"We feel the judge has not considered the fact that disguising penalties as a fee for a service is a very common device for circumventing established law.

"The judge appears not to have looked behind the words on the contractual document," he said.

Possible appeal

Although Mr Berwick turned up at the original hearing in Birmingham to argue his case and was questioned by the judge, Lloyds TSB chose not to attend and relied simply on a written defence which it had submitted in advance.

Neither did the bank have any lawyers present in court when the judgment was handed down.

Mr Berwick said he was annoyed by the outcome of his claim.

"I was expecting to win as I made a good job of arguing my case," he said.

He is now considering an appeal after the judge gave him leave to do so.

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Thanks a lot for that. Bad timing I guess and the amount mentioned in the story is about the same as the amount my friend wants to claim!


Still I the potential benefit still outweighs the risk!

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