The banks have been charging excessive fees to their business and household customers for many years. These charges have been applied for such actions as sending out a letter requesting you to meet with your bank manger, telling you that you had gone overdrawn by a very minor amount (far less than the cost of the letter advising you that you were in debt) and any excessive charges for being overdrawn. The same applies to credit cards companies (often banks) who have applied excessive late charges.
In some cases, these charges could push clients into a situation where they could no longer repay the amount owed due to the high charges imposed by the bank on an already stretched account and this extra financial burden could lead to businesses and individuals going bankrupt and in some case to clients committing suicide. And all in the name of profit, fat bonuses and shareholders dividends.
Until a few years ago, there was nothing you could do to get back these costs. However, a number of clients took advice from various bodies and were encouraged to challenge these fees through court action. It quickly became clear that the last thing the banks wanted was to have these costs challenged in a court of law, so they started to refund charges when threatened with action, rather than be taken to court. In typical banking fashion though, they did not repay the full cost of the charges with interest, as they should have done. They chose instead to offer a settlement out of court almost always less than the actual charges owed. The clients, faced with potentially mounting legal costs and a court appearance, usually settled at this lower figure and the banks were happy as they had still made a profit on the charges. Not once did the banks allow a case to go to court and set a legal precedence but despite this, they did not cease to charge these excessive fees. It is estimated by the OFT, that the credit card charges alone exceeds £300,000,000 a year.