ALTHOUGH consumer group Which? says more than a quarter of a million template letters and factsheets on reclaiming bank charges have been downloaded from its website, many customers possibly entitled to compensation from big High Street banks have yet to claim. The dispute, which could eventually cost the banks billions of pounds in compensation, is at a critical point with the Office of Fair Trading (OFT) about to rule on what it regards as a fair level of bank charges. It will be the latest episode in a battle started three years ago when sharp-eyed law student Stephen Hone noticed that Abbey - then Abbey National - had levied two charges of £32 each on his statement for breaching an overdraft limit by a few pennies. He took the bank to the county court, won a judgment against it - and £5,000 in compensation which paid for a website advising others how to sustain similar complaints. Since then, Which? and other lobby groups have joined the battle with the banks. One website - www. moneysavingexpert.com - claims to have received 1.6m applications for its template letters of complaint. When the OFT ruled last April that default charges on credit card users should not exceed a reasonable estimate of admin costs incurred and suggested a £12 cap, bank charges were clearly next in line. An OFT fact-finding exercise on current account fees began in September, 2006 - and reports any day now. Meanwhile, the banks might still be holding much of the money collected through account charges they may soon find it hard to sustain - partly because they have so far avoided a court judgment on their view that £25 is a reasonable level of account charge. Says Doug Taylor at Which?: "Using figures from survey firm Mintel, just over 70m bank accounts in the UK are held by 48m people. "As many as 10m of them might have a fair complaint to make about charges on their account in the past six years, but probably only 1m are actually making a claim. "This controversy took time to take off, and it could run for months to come. "Some people might think making a claim is rather complicated, when it is usually fairly straightforward." Price comparison website uSwitch.com says many people can't be bothered to go back through years of account statements to see what they might be owed. Exceeding an authorised overdraft limit is the most common reason for charges. A Credit Suisse analysis of current account charges last month (February) reckoned the average charge for an unauthorised overdraft is £28; for a bounced cheque it is £35.17, with HBOS leading the way on £39. In total, uSwitch.com reckons nearly 19m people incurred bank charges at some point within the claim period of the past six years - possibly generating £4bn for the banks. But uSwitch.com thinks 52% of those who paid too much have yet to claim money back. "As a result, a pot worth £2.12bn is waiting to be reclaimed," it says. "For just £10, people can request copies of previous bank statements and write to their bank to reclaim charges incurred over the past six years, with 8% interest payable on top." uSwitch.com reckons that if bank charges had used the £12 limit applied to credit card charges by the OFT, fee income to banks from current account charges would have totalled about £2.2bn. | 
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