A common area of dispute are the heavy charges levied by many banks when a customers account is overdrawn and they are unable to make a payment. Customers may have an existing overdraft limit or non at all.

"Fines" which are made for returning direct debits, cheques or standing orders varies between banks and can range from £10 to £30 or more.

Besides the change by the paying bank, the recipient of the payment may also levy a "fine" for none payment, usually a charge for writing to the customer to advise them. This varies and can be £10 to ?50 or more.

The total cost of a non payment may be ?50 or more by the combined cost of charges.

A further drawback may be the fact that the extra changes on the account may push the account further overdrawn creating the opportunity for further "unpaid" orders, with even more added charges. This "knock on effect" can soon escalate an account into hundreds of pounds overdrawn.

Clearly if the customer is genuinely in cash flow problems and not controlling his or her finances then these charges are all justified.

There may however be genuine reasons why the charges should not have been made, and the problem was caused by a bank error or errors in the banking system which were not the direct fault of the customer.

Since banks are largely automated decisions to not pay orders, and levy "fines" and charges are handled dispassionately and automatically with no knowledge of the circumstances behind the problem.

It may be that the circumstances if presented to your bank will result in a full or partial refund of such charges.

What can I do?

• Look at the history of the events by day/date

• Look for missed or late payments due into your account

• Check the due date of the payment which was returned, was it paid early?

• Check back on previous statements to see when payments had been made before

• Make a list of dates and charges

What then?

Call into your bank's local branch and explain to a personal banker or suitable finance advisor the problem.

Ask for a private meeting, this is not something you should discuss in public.

Or call a customer services telephone line, this may involve a lengthy wait and some security checks may be needed. It is not possible to contact many local branches direct, all calls are routed through a Central Contact Point which may be in a different area or indeed country.

If there are no dangers of further charges and you are claiming for refunds of past charges it may be easier to set out your claim in writing to the branch or regional centre.

What arguments can I use?

• My salary or other payment to my account was late or missed it was NOT my fault, why should I bear the consequences?

• The bank attempted to make the payment early when the account was in overdraft or had insufficient funds, the order to pay was specific by day of the month.

• The bank had previous made an error in a payment creating a low balance or overdraft which had the knock on effect of creating reasons for non payments.

What can you expect?

A decision may be discretional, and although you may not be entitled to a refund the bank will grant a refund of the bank charges in full or part.

If the error was a direct result of a bank error not only should the bank made good any charges but also become responsible for your charges levied by the recipient (the person or firm you should have paid), often the bank can deal with this internally.

You may have to contact the recipient of the missed payment to seek a refund of charges made for non payment, this may be more difficult to prove unless there is a direct relationship between your bank and the recipient, and the bank has accepted it made an error in the missed payment.

Some recipients may ignore all reasons for non payment and rigidly apply a late payment charge.

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