Reclaiming unfair credit card charges

Money Advice Service

If you’ve had charges added for late or missed credit card payments or for going over your credit card limit you might be able to reclaim some of them, particularly if you’re struggling with debt. Check your rights and options for complaining – including for charges dating back several years.

Your right to reclaim

In 2006, the Office of Fair Trading (OFT) said that credit card charges for late payment or missed payments or exceeding credit limits were too high and didn’t reflect the real cost to the credit card companies.

At the time, the charge was generally between £30 and £35, but the OFT ruling led to most companies reducing their charges down to £12 or less.

If you had debt or other problems that meant you were continually being charged late or missed payment fees before the OFT ruling, you could have accumulated hundreds of pounds of extra debt.

You might be able to claim back some or all of the difference between what you were charged and £12.

How to reclaim

1. Work out how much you’ve been charged

If you have online banking you might be able to look back over your statements for years to see what you’ve been charged.

If the information is incomplete or you can’t get it this way, write to the card provider asking for a list of all the charges it has ever taken from your account.

If they refuse, write again asking for the information under the Data Protection Act, and enclose a cheque for £10.

Find out how to access your personal information on the Information Commissioner’s Office website

Important – don’t ask for credit card statements or you could be charged a lot more for the information. Instead, ask for details of every charge.

Under the Data Protection Act, card providers have 40 days to reply. If your card provider doesn’t reply on time, you can complain to the Information Commissioner.

2. Complain to your card provider

When you have a list of the charges, add them up and think about whether you were in financial difficulties at the time.

Write a complaint letter to your card provider explaining:

  • what difficulties you were having
  • how the charges contributed to your difficulties
  • how it affected you – the stress and anxiety it caused
  • why you think that the charges were too high in the circumstances.

See later in this guide for a link to letter templates that you can use to help you.

3. Consider the card provider’s response

If they make an offer, decide whether you think it is fair based on how much you feel the charges contributed to your difficulties and distress.

Once you are clear about your response, write back either accepting their offer or stating what you think is a fair refund under your circumstances.

If they write with further questions, make sure you answer them as completely and honestly as possible and wait for the next response.

If they write rejecting your claim outright – either the first time around or after you reply to them with more information or a suggested resolution – complain to the Financial Ombudsman Service.

Don’t be put off by any response that suggests that you are not entitled to a refund and that you should give up – no matter how legalistic the language might sound.

If you need help drafting your letters, use one of the templates provided below as a starting point.

Complaining to the Financial Ombudsman Service

The Financial Ombudsman Service will consider your case and, if it feels you have been treated unfairly, ask the credit card provider to refund you in full or in part.

There is no charge for using this service, however, you can only complain to the Financial Ombudsman after you have complained directly to the credit card company.

Beware of companies that say they want to help you

Avoid using companies that say they can help you reclaim unfair credit card charges.

Although some are authorised and regulated by the Ministry of Justice they are no more likely to be able to win compensation for you than if you claim yourself.

These companies charge high fees for writing a few letters that you can easily do yourself.

Sometimes they take 25% or 30% of the charges you recover, which would be £250 to £300 of a £1,000 claim.

Get free help by following the guidance on MoneySavingExpert or talking to your nearest Citizens Advice Bureau.

How to avoid credit card charges

Top tip

You can avoid missing credit card payments by setting up a Direct Debit, standing order or diary reminder to make sure you don’t miss future repayments.

You can pay as much as you like by Direct Debit as long as it’s at least the minimum payment.

If you’ve been charged just once by a credit card company, it will often let you off if you phone up and ask.

Call your card provider, explaining that you made a one-off slip, and ask for the charge to be cancelled.

If you’ve missed any payments on your cards, bills or loans, and you are struggling to make ends meet it’s important to seek debt advice as soon as possible.

Read our guide below to get contact details.

Reclaiming mis-sold payment protection insurance

If you think you have been mis-sold payment protection insurance (PPI), you might be able to reclaim this. Find out more:

This article is provided by the Money Advice Service.

Links with an * by them are affiliate links which help Rest Less stay free to use as they can result in a payment or benefit to us. You can read more on how we make money here.
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