The man who said 'no' to bank charges

When Marc Gander was charged £150 for going into the red, he launched a fightback campaign that could cost the banks billions in compensation and refunds

As revolutionaries go, Marc Gander is as about as unlikely as they get. He's 57, a family man and ex-law lecturer with two adopted kids living in north London: hardly a modern day Che Guevara. But as co-founder of the Consumer Action Group, he's become the scourge of Britain's banks.

Set up in 2006, the action group has 200,000 members and has to date helped bank customers to reclaim more than £700m in charges levied on them by banks because they went into the red. And this is small change compared to what the banks may have to cough up soon.

Last week, in a landmark ruling, the High Court said the Office of Fair Trading was allowed to decide whether the current bank charges regime was fair or a rip-off. Ultimately, this could lead to the OFT ordering banks to lower their fees and pay compensation to customers who've paid charges in the past equivalent to £10bn.

"This is a great win and the banks should now pay up what they owe. The Government gave the banks £50bn recently and now they have something to spend it on," Marc says with glee.

It all started with Lloyds charging Marc £150 when he went into the red. "I had been off work ill and I briefly went over my agreed overdraft limit and was hit with £150-worth of charges by Lloyds. I argued with them, but they threatened to withdraw my overdraft altogether at a time when I was vulnerable.

"I was furious at their bullying. They thought they could get away with whatever they wanted because they're a big bank and I'm just a customer." Not giving in to Marc could be one of the costliest errors ever made by a bank: "I'm a lawyer and decided to look at whether the banks had the right to levy the charges they do. I soon found they had no right whatsoever."

What Marc had discovered – though this is yet to be tested in the courts – was that penalty charges were illegal under UK contract law. He posted his discovery on a chat room and was contacted by an internet expert, Dave Smith. "We chatted and decided to set up a website to let people discuss charges. I put a legal letter on the site that people could download and send to their banks asking for a charges refund. We imagined we'd get a couple of hundred users. We were way out."

A trickle of interest soon turned into a flood as news got around that the banks, keen not to test Marc's theory that penalties were illegal, were simply paying up when customers made a claim. "It snowballed, we started to get lots of media interest, papers started running campaigns and Martin Lewis got involved through his high-profile website Moneysavingexpert."

By mid-2007 the banks were inundated with claims from 300,000 people wanting past charges refunded. Fearing an administration meltdown, the banks asked the City regulator if they could put claims on ice while the High Court decided what powers the OFT had in the case.

Now the OFT has won, Marc, like all good revolutionaries, senses his enemy's weakness: "When it [the OFT] decides the charges are unlawful there will be a big price to pay. What hasn't been factored in is the collateral damage caused by the banks' unfair charges. Thousands of people have had their credit records and their reputations damaged, others have lost their business or been forced into bankruptcy. They must be compensated for this in full."

Thinking back to his own brush with the banks two years ago, Marc says: "I bet Lloyds wish they'd never charged me that £150." I bet they do.