IT HAS become the biggest consumer revolution of modern times. Claims from customers for the refund of bank charges have cost the finance industry millions of pounds since the Office of Fair Trading (OFT) ruled last year that penalty fees more than £12 were unfair.
Last week, Scotland's Govan Law Centre was awarded custody of 100,000 for a fighting fund to encourage people to launch legal challenges against what they say are illegal bank charges. The money has been pledged by MoneySavingExpert.com, a consumer website, and the Consumer Action Group (CAG) as well as private individuals.
It is hoped the funds can be used for claims that could set a legal precedent in the fight against excessive overdraft charges. The move comes after two county courts in England ruled against customers of Lloyds TSB.
In the first, a district judge at Birmingham County Court dismissed a claim Kevin Berwick brought against the bank on the grounds that charges were a legitimate part of the current account service. It was found that he had failed to lodge sufficient evidence.
The ruling, on 15 May, led to concern that people would be deterred from reclaiming fees levied by banks, which can be up to 38. Campaigners say the real cost is 2.50 and argue that the fees are unlawful.
In the second ruling, on a claim for 3,000 by Julian Rudd, on 11 May, a judge at Lancaster County Court found Mr Rudd, a builder, had failed to state an adequate claim.
The news of the second case came after the announcement of the fund by Martin Lewis, who set up MoneySavingExpert.com and is a frequent guest on GMTV. Mr Lewis said "hundreds" had claimed since the ruling and urged customers to continue doing so. He said the courts were ignoring the Berwick ruling.
"This case has no bearing in law and in practice sets no precedent", he said. "This is a desperate attempt to scare people away and it is important that we do not allow their spin and spiel to put people off.
"In football parlance, the banks are crowing about the fact that they are now only losing 100,000 to one and not 100,000 to nil. I'd urge everyone who has already had a payout to act as reclaiming ambassadors and persuade others to take up the gauntlet."
Anti-charges campaigners said that they would activate the legal fund if a customer with a strong enough case that could set a precedent comes forward.
Mike Dailly, principal solicitor at the Govan Law Centre, insisted the rulings were made because the cases were not adequately presented rather than because of a change in the status of the claims.
"The fighting fund is there in case it becomes necessary to take a case to a court of appeal but the vast majority of cases never get that far because claimants are following their instructions carefully and correctly," he said.
"The greed of the banks has been brought to an end by consumers taking action and we would encourage anyone with a claim to follow the instructions on our website."
Earlier this year, the Govan Law Centre celebrated the millionth download of letters from its website, which people can use to make banks hand back cash taken under penalty clauses. Unlike some firms which help a claimant but then claw back a percentage of the recovered money, the Govan Law Centre can give free support.
Marc Gander, the co-founder of the CAG, said that although most claimants were given refunds without going to court, it was vital that cases that did end up in court were properly prepared.
"Those who do go to court usually win by default. Yet for the rare few where the bank does put up a defence, the big lesson to learn is that even where [the banks] don't show, it is still worth doing proper preparation."
The highest-profile case so far has been brought by the barrister Tom Brennan, who wants the High Court in England to award exemplary damages against NatWest, part of the Royal Bank of Scotland Group, for charging him 2,500 in fees during his legal training.
A decision over whether his case will proceed to trial is expected next month.
Other pending cases include that of Harry Turnbull, an architect, who is trying to make Scottish legal history by claiming hundreds of pounds in charges from Clydesdale Bank.
He is attempting to prove that around 3,000 of overdraft fees imposed on him in the past seven years were "fraudulent and deceitful". If successful, his case would set a legal precedent for banks in disputes with customers over charges.
At Edinburgh Sheriff Court in April, Mr Turnbull, 62, was told to amend his claim to include more specific allegations and to prepare evidence for a hearing in the middle of this month.
With the backing of the CAG, he is claiming that bank overdraft fees are "penalties" - because the charge to the customer is around 30, when the cost of an account exceeding its overdraft limit is no more than 2.
The dispute began when Mr Turnbull wrote to Clydesdale Bank to ask for a refund of the charges he has paid since 2000. When it refused, he raised an action to claim back 1,500 - the maximum allowed under Scots law in a civil summary hearing.
Clydesdale agreed to pay back some of the money he had paid in the past five years - citing the Prescription and Limitation (Scotland) Act, which states a claim cannot be made more than five years after it arose - but Mr Turnbull refused the offer.
A spokesman for the Clydesdale Bank defended the charges, saying customers should be responsible enough not to regularly surpass a pre-agreed limit.