Peckhamboy - I didn't say the charges are illegal, I said the banks have no legal right to levy punitive charges, they can only recover the money they have lost. That is what the legal argument is about. The banks have to prove that they lose ?30 - ?50 (or whatever they charge) in administrative and other costs, when you go overdrawn, bounce a cheque, fail to have funds to cover a payment etc. They are unlikely to be able to prove this as it costs them nowhere near that amount, so the court may have to decide what is a fair charge. Anything they charge extra to their costs is a punitive charge and is not legally allowed.