As high street banks announce billion pound profits, Lindsay Jennings looks at the growing customer revolt which is seeing thousands of people claim back their bank charges.

THE chat rooms of the campaigning website, Moneysavingexpert.com, are buzzing. It seems a new message is posted every couple of minutes. Nowhere are the questions flying thicker and faster than in the section - known as a thread - dedicated to challenging so-called illegal bank charges.

"I am in the process of reclaiming my bank charges," posts Jon. "I am trying to find out if I can also reclaim the interest they charged me for going overdrawn, as well as the fees. Does anyone know this?"

Within four minutes, a reply is posted. "No, you can't claim interest", writes a helpful sort with the name pigsmightfly. "See the following link for all charges you can and cannot make."

It is this on-line community which has played a major part in forming a mass consumer revolt against what is seen as banking fat cats. While the big four - HSBC, Barclays, Lloyds TSB and Natwest - are expected to post billion pounds profits over the next fortnight, there is a people's campaign gathering pace to reclaim thousands of pounds in what have been described as illegal bank charges.

Moneysavingexpert.com, which describes itself as "free to use", "free of ads" and intent on "consumer revenge," has become one of the main consumer rights forums.

The site was set up by financial journalist Martin Lewis, who now makes regular appearances on GMTV and Radio 2's Jeremy Vine Show, where he gives advice to consumers in his trademark rapid fire brogue.

It was while writing a money saving expert column for a newspaper that he came across the idea for the website.

"I began to send tips to my friends as and when I spotted a good deal during my research," he says. "Jokingly, I called it 'Martin's Money Tips'."

"After a couple of months, I was at a party and people I'd not met kept thanking me for the emails. It turned out my friends were forwarding it to their friends, so to make it easier, I set up an email list built around a basic homepage."

The email soon took off and, with 1,000 recipients, he paid a web designer in Uzbekistan £100 to design a site. It was launched on February 20, 2003 and now attracts 2.4 million visits a month, with more than 670,000 signed up for the weekly tips contained in the emails.

The advice on-line ranges from how to get the best credit card deal or loan, to the latest money saving offers.

But even Martin could not have imagined that he would one day help around a million people rebel against the charges that banks levy. Individual claims range from £70 to several thousand pounds.

The revolt is based on the premise that the charges are illegal. According to British law, lenders are not allowed to charge more than the costs they have actually incurred when processing instances of unauthorised borrowing. While banks may ask customers to pay the cost of issuing a standard letter or computer process time, they are not allowed to make a profit on the transaction.

But many of the big banks charge up to £35 a time when customers exceed their overdraft limits; cheques are bounced or payments not honoured when customers do not have sufficient funds in their accounts.

The campaign to reclaim charges received a huge boost last April when the Office of Fair Trading (OFT), which enforces consumer protection law, ruled that, within the credit card industry, an unauthorised borrowing fee of more than £12 was almost certain to be illegal. It came at a time when credit card companies were charging well above that fee.

Since then, the OFT has been carrying out an on-going investigation into bank charges and the results are due to be published in the next few weeks. It is possible that it could rule that penalty fees such as overdraft charges levied by banks should be capped like the ones it introduced for credit cards.

The banking industry, meanwhile, has consistently said their charges do not break the law.

The British Bankers Association says that fees are "fair and transparent" and that the banks make it clear to customers when they open their accounts that there are fees they will pay in certain circumstances.

"These are fees charged in return for a service," Angela Knight, chief executive of the British Bankers Association said yesterday. "The fees reflect the work involved for the banks."

But, as hundreds of thousands of people have found already, the banks have settled most complaints about bank charges, covering charges dating back up to six years. In some cases they have been forced to do so after facing challenges in the small claims court, which an individual can bring for £80 - a fee refundable if you win your case. However, with this revolt comes repercussions. If the banks are forced to repay millions of pounds in charges then it is likely they will look at ways of recouping those costs.

Banking analysts believe that we are already on our way to seeing an end to free banking and could follow the path of some banks in Europe which already charge people for having current accounts. In Britain, Internet bank First Direct has already announced it is going to charge current account customers a monthly fee of £10 unless they pay in £1,500 a month, keep a balance of the same amount, or take out another of the bank's products, such as a savings account. If the OFT does decide that penalty charges levied by banks are excessive, then that pressure to charge for accounts will only increase.

But as the chatrooms at moneysavingexpert.com testified yesterday, there appears to be a growing sense of injustice around bank charges - and it shows no signs of abating.