Sir, - High street banks made £45bn profit in 2006. Which? consumer group estimated £4.75bn came from "illegitimate" penalties. Coincidentally, Save the Children suggested a similar annual investment is necessary to lift 3.8 million British children out of poverty.

Bank charges hurt those least able to afford it - working mothers on low income, for example. I know of three local households whose "delinquent" accounts were mugged for a total of £9,900 in the six year reclaiming period. Charges upon charges led to mounting stress from county court action, council tax and rent arrears.

Banks appear to flout the law when knowingly charging customers receiving Working Tax Credit, Child Benefit, etc. Purported to combat rampant inequality, the Social Security Administration Act 1992, s187 and Tax Credit Act 2002 s45, explicitly define such benefits as "inalienable" public monies paid for family essentials, not creditors' fees and profits.

Whistle blowers and expert opinion variously estimate the cost of administering unauthorised overdrafts between 10p and a generous £2.50, not £25-£39. Consequently, banks repaid an estimated £400 million in "goodwill" in the first half of 2007 rather than make their true costs public by defending court claims.

Banking watchdogs and banks recently agreed to a precedent-setting test case to resolve the charges' legality under Unfair Terms of Contract law. Justified as protecting consumers from legal uncertainty, the agreement granted banks a protective waiver from actions by the Financial Ombudsman, until fairness is resolved in some misty high court future.

Common law suggests that default charges should recover costs only, not penalise or make a profit. So, despite the alleged uncertainty, customers continue winning undefended lower court claims where some independent judges still choose to exercise their own initiative.

Aggrieved consumer groups were not consulted in the OFT-Banks agreement.

They perceive denial of justice whereby banks received a reprieve from claims yet continue profiting from charges despite their unknown legality. That is unknown in an legal sense. The banks, ombudsman, lower court judges and customers already know, but until higher court ruminations gives permission for everyone to know what they know, nobody knows.

Tangled web aside, charges will continue to cause alarm or distress, fulfilling the fashionable definition of anti-social behavior. Despite this, big business and government, perhaps the banks' only remaining friends, continue encouraging workers and benefits recipients to use banks' services.

RICHARD AKERS

Topcliffe Road,

Thirsk.