Step 1: Open an alternative account

Sadly some banks will take their revenge by closing down your account when they pay out, so set up another one elsewhere just in case. The Financial Ombudsmen has recently ruled against a bank for doing this, so it is worth making an official complaint and you may get even more compensation.

Step 2: Total all your charges

You need to know all the fines you have been charged by each bank or credit card, including charges from closed accounts, over the past six years (the time period is limited by law).

Send a letter to your bank requesting a comprehensive list of all past charges. You have a legal right to do this under the Data Protection Act, and the bank can charge a maximum of £10. You can find a template letter at which.co.uk/bankcharges.

The bank has a maximum 40 days to respond. If you don’t get a reply, follow up with a telephone call and then report it to the Information Commissioner for a breach of the act.

Step 3: Claim your money back

Write again to your bank, saying you believe the charges were disproportionate and claiming your money (again see the template letter at the Which? site). If you are claiming for bank charges, ask for the full amount until the OFT rules on what level is ‘fair’. For credit cards, you are likely to get the difference between what you were charged and the £12 level set by the OFT.

You can also claim for interest on top - if you won through the courts, you would be entitled to add 8% from the date you were ‘first deprived’ of the money (the date of each charge). You are not legally entitled to the interest until you head for the courts, but it is worth asking.

The most likely outcome is that you will be ignored, refused or offered only some of the money, so you will need to pursue your case elsewhere.

Step 4: Threaten legal action

You can either go through the small-claims courts or the Financial Ombudsman Service (financial-ombudsman.org.uk). The latter is free and the FOS says claims are taking around three months to be settled. However, to date, the banks have all backed down and refunded claimants before a full investigation has been launched. If the bank disputed your claim and the FOS investigated, the process could be much longer.

Small claims in England and Wales are limited to £5,000 before interest. Go to the Moneyclaim website (moneyclaim.co.uk) and lodge your claim by filling in the form. There’s a fee of £30, which can be paid by a credit or debit card, although hopefully it will be refunded if you win.

The bank must respond within 21 days or you will win by default. Most banks are lodging a defence but then backing down before the case gets to court.

Step 5: Send in the bailiffs

Even when the banks don’t defend a claim, they won’t always pay up automatically - even though they have lost. If the bank doesn’t pay, you have a right to send in the bailiffs to claim the money.