Alliance & Leicester customers who take the bank to the Small Claims Court to recover unfair bank charges are now being asked to take their business elsewhere.

Customers are increasingly aware that the level of charges levied by banks when overdrafts are exceeded, or payments returned, are considered unfair. The Office of Fair Trading (OFT) ruled in April that any charge over £12 would automatically be classed as unfair, warning banks and credit card companies that they could face legal action if they failed to comply.

In a move that may well be backfiring, Alliance & Leicester are closing the accounts of customers who have had to resort to take legal action to reclaim charges from the bank, explaining:

"As it is clear that you do not accept certain aspects of the terms and conditions for the operation of your account, we regret that we are unable to continue to offer you banking facilities."

Whilst the move may well dissuade some of its more timorous customers into asking for charges to be refunded, it has also attracted the interest of the mainstream media including the BBC and Daily Mail. Such publicity may well be unwelcome, as the bank itself has failed to even turn up to defend a single case in court so far.

How To Claim Back Bank Charges

Banks are entitled to charge for the cost of running your account. They are even entitled to charge for sending you a letter, but no more than the actual cost incurred. A reasonable charge might be £1 or so for a computer generated letter, but the current practice of charging £25 and upwards is unlawful and could not be successfully pursued through the courts.

If you've been charged by your bank, you have a good chance of reclaiming the charges, however your bank may decide that it no longer wants your business. For this reason, you should consider opening another account first in case this happens.

A Glasgow law firm has set up a website that contains template letters you can use to ask for your charges to be refunded. It explains the process in full and even contains guidance on how to launch a small claims action if your bank decides to be awkward. Visit bankcharges.info from the Govan Law Centre for more information.