A revolt against bank charges is to intensify after a new study suggested that branches charge about 10 times the cost of dealing with an unauthorised overdraft or bounced cheques.
An investigation by experts commissioned by the BBC's Money Programme suggests excessive fees rake in £4bn a year. The banks have been bombarded by customers challenging them to refund fees worth millions of pounds.
Campaigners say that under the 1999 Consumer Contracts Regulations, banks may only charge what it costs to process defaults. Since the banks will not disclose their costs, the programme commissioned a panel of two top business academics and a former senior executive with NatWest to come up with the figures.
They were asked to take account of all the expenses banks might face in dealing with customers' defaults and come up with the highest costs banks could justify. According to the panel, banks spend no more than £2.50 on direct debits that cannot be paid or deal with unauthorised overdrafts, and no more than £4.50 on a bounced check - yet the banks charge an average of £30 for the defaults.
Stephen Hone, founder of the website www.penaltycharges.co.uk, said: " It clearly shows the banks have been scamming people for years on these charges and they are totally unlawful, so it shows people that they can go back and claim their money back."
The study, for the Money Programme's show "Bank Robbery!" at 10pm tonight, will be assessed by the Office of Fair Trading. The OFT believes the same legal principles which led to it judging credit card penalties to be unlawful in April also apply to banks.
Consumer groups have published forms online for people to challenge their bank going back six years. Which? magazine says its Anti Social Banking Order (Asbo) campaign, which was launched in March, has been one of its most successful. A spokeswoman said: "Under the banking code, banks should treat cases of financial difficulty sympathetically and positively. Levelling hundreds of pounds worth of charges is not helpful."
Which? estimates banks charge £4.7bn in fees on current accounts each year, while one senior banking source told the BBC the figure was £4.5bn. Given the costs may amount to only 15 per cent of the charges, customers could be paying £3.8bn too much every year.
Martin Lewis, creator of website Moneysavingexpert.com, urged people to take on the banks.
The British Bankers' Association said that the charges were " transparent, fair and legal" and only levied when customers went outside the agreed operation of their account.
Mounting a challenge
Bank charges may be refunded under section 2E of the Consumer Contracts Regulation Act 1999, which states a charge must be proportionate. Campaigners say banks can only charge for the costs they have incurred. Individuals may request a complete list of charges dating back six years and the bank must comply within 40 days. A refund, with interest, may then be requested. If the bank does not respond satisfactorily, a case may be taken to the small claims court. Information on challenging the banks can be found on consumer websites.