Increase in UK Bank Charges

Banks are increasing charges through introducing new types of charges. This is response to the investigations of the FSA who are declaring some bank penalties as illegal. For example customers who were charged mortgage exit fees of more than £65 can claim the excess back.

However to retain profit margins many banks are introducing new charges including

New Bank Charges being introducing

LLOYDS TSB

Introduces charge of £35 for people who use credit card infrequently. Personal loan rate up half a per cent

ALLIANCE & LEICESTER

Jump of 0.4 per cent in loan rates in past two weeks

BRITANNIA BUILDING SOCIETY

Mortgage exit fee up from £75 to £110 in January

CITIBANK

Charging £120 a year for current accounts from 1 May

MINT

Loads up to 1 per cent on to interest for personal loans

NORTHERN ROCK

Loan rate rises 0.3 per cent to 6.1 per cent in January

MORGAN STANLEY

Raising fee for foreign purchases on credit cards from 2.75 per cent to 3 per cent from April

MBNA

Introduces charge of £10 for credit card users in credit last month. A 7 per cent rise in interest rates for personal lending, from 7.9 per cent to 14.9 per cent.

How to Reclaim mortgage exit fees

How To claim a refund for your Mortgage Exit Fees.

Mortgage exit fees are the amount of money your bank or building society charge if you remortgage and leave them for a different lender.

Mortgage exit fees should not be confused with early redemption penalties. These fees are charged if you leave your mortgage earlier than the stated time period in your mortgage contract. These are an additional fee to an exit fee.

In recent years the average cost of mortgage exit fees has increased from around £50 to between £200 to £300. Many mortgage lenders argued that their small print justified raising their mortgage fees. Although legally this is correct the FSA ruled that the increase in exit fees should have some justification rather than have been an arbitrary increase. (The real reason is that in an increasingly competitive remortgage market, increasing exit fees were usually a painless way to increase profit margins for the lenders) At the end of February most mortgage lenders such as the Halifax, Nationwide, HSBC, Alliance and Leicester and Northern Rock agreed that they couldn’t justify their mortgage exit fee increases They have said they will be willing to refund customers who have been charged exit fees in recent years. However the onus is on the customer to come forward, don’t wait for mortgage lenders to give it back voluntarily.

Who can Reclaim Mortgage exit fees

Anybody who has remortgaged in the past 2 or 3 years can claim for a refund of the difference between the exit fee on your contract and the exit fee you were charged. For example if your contract says you would be charged £60 but the bank actually charged £200 you can claim a refund on the difference between the two.

It should be quite a simple process to get the money bank. Just write a simple letter to your mortgage dealer. It may be worth ringing their general helpline to ask for best department to write to. In your letter simply state that the exit fee you paid was higher than the initial fee quoted when you first took a mortgage out. Under the recommendation of the FSA the bank is obliged to refund the difference.

Lost Paperwork.

If you can’t find your initial contract it is still worth writing to your bank and asking for a refund. They are likely to cooperate and tell you what the existing charge was. However if they don’t cooperate it may be difficult to force them

Mortgage Exit Fees Refund

If you remortgaged in the past 5 years it is likely you could benefit from a windfall. The FSA has stated that mortgage lenders must justify any increase in mortgage exit fees. Where there has been overcharging in the past they must pay consumers back.

However the responsibility to claim the money back rests with the consumers. If you write a letter to the bank or building society asking for money back they should pay the money back.

The big mortgage lenders such as the Halifax, Nationwide, Abbey National and others are agreeing to pay the money back, but are in no hurry to do so. There is already a backlog of requests. The typical refund is £100

Portman Building Society and The Mortgage Works have reduced their exit fees from £199 to £145.

One of the lowest exit fees can be found from the Britannia Building society which currently only charges about £105. Most building societies charge double this amount