It all counts
Bank charges. You see red when your bank levies a fee for being in the red.
One charge seems to beget another and, before you know what you're doing, money is disappearing from your account fast.
Unless you have been on Mars for the past year, it should have come to your notice that thousands of customers are claiming back some of the penalty charges levied each year - with estimates for the money banks make from these ranging from pound;1.2bn to pound;4.7bn.
By law, the banks are not supposed to make profits from their charges. Any fee should simply cover their costs. Given that banks claim up to pound;40 for a single charge if you go overdrawn or a cheque bounces, the argument against them is that it hardly costs tuppence to issue a letter, let alone pounds.
So, if you feel there's a considerable amount of your money that has ended up in the bank's coffers rather than helping shore up your own account, then here's how to set about reclaiming it. You can claim charges for the past six years. As if you need any more convincing, one person was recently paid back more than pound;17,000. More than one million template letters have been downloaded from www.moneysavingexpert.com for people to reclaim unlawful charges.
First, work out what you are owed by either going through paper statements or looking at them online. You need to make a note of the date, the amount and a description of what it was for.
If you haven't got all this information, then you should write to your bank asking for it and state that you are using your rights under the Data Protection Act. Include a cheque for pound;10 for this service.
At this stage call your bank, or write a letter, telling them that you did not give them permission to take the money from your account and that you would like it back.
There are numerous templates of carefully worded letters online - see websites below for examples. Follow up this letter with a call a few days later.
Always make a note of who you have spoken to, on what day and at what time, as well as their response.
If the bank doesn't write back within two weeks, make another call. At this stage, some banks may offer a partial refund. Neil Faulkner of www.fool.co.uk suggests that you write to them again to tell them this is not acceptable. If the bank says someone will get back to you, tell staff in writing that you will give them 14 days before going to court. This may sound scary, but all the consumer lobbying groups advise customers to stick to their guns, because, in most cases, the banks have paid before going anywhere near court.
Martin Lewis of moneysavingexpert.com suggests that you set up a "parachute" bank account before embarking on any of this. If your bank pays up, but decides to close your account, you will need somewhere to put your cash. He also suggests that you charge interest on top: if you win in court you would be entitled to add 8 per cent interest from the date the money was taken from your account. So why not add it in at the start?
Martin has a special calculator on his website that will work the interest out for you. If you do end up having to take your bank to court, it's not as frightening as it sounds. Cases under pound;5,000 - before interest - are handled by the small claims courts in England and Wales. For Northern Ireland, see www.courtsni.gov.uk and Scotland, see www.scotcourts.gov.uk.
For English and Welsh claims use www.moneyclaim.gov.uk to make your claim.
Fill in a form and pay a fee of between pound;30 and pound;120, depending on the size of your claim.
Send a letter to your bank informing them of the action you have taken and sit back. At this point the bank may settle in full or do nothing, which means you win by default after 14 days. Even if the bank issues a defence, it has been rare for them to take it any further, settling at the 11th hour.
And if your refunded money doesn't appear in your account, use Moneyclaim again to send in the bailiffs, suggests Martin.
He does warn that the banks are still developing their policies to fight back, so keep an eye on the news or consumer websites to see if the situation changes while you are processing your claim.
If you're the lily-livered type who is already quaking in your boots at the prospect of this process, contact the free Financial Ombudsman Service. For a lot of claimants, that's been enough to put the banks in their place and make them pay up in full. Always keep in mind that the bank has charged you unlawfully www.financial-ombudsman.org.ukwww.moneysavingexpert.com
* Banks make profits from their penalties in the order of 2000 per cent.
* It is estimated that one in five bank customers is a victim of unlawful penalties.
* Banks are set to make a profit of pound;42 billion this year.
Source: The Consumer Action Group