Banks rake in £1.2 billion a year from penalty charges, a study from leading city bank Credit Suisse has found.
Not only do banks stand to lose a substantial chunk of their incomings if the current Office of Fair Trading (OFT) investigation into penalty charges finds them to be unfair or unlawful, they may also be forced to compensate individuals for past penalty charges dating back up to six years.
This could leave Britain's banks and building societies with a £7.2 billion bill in repayments, the report's authors warned.
"Banks are taking too much money," MoneySavingExpert.com's founder Martin Lewis protested.
Current bank penalties imposed on customers who spend an unauthorised amount out of their overdrafts or submit bounced cheques are often as high as £35.
The OFT is widely expected to cap charges with a possible £12 upper limit.
It will reveal its conclusions next month.To learn more about reclaiming bank charges, click here.
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