Bank charges came under renewed scrutiny yesterday after a student claimed she had been charged more than £800 after going just 8p overdrawn.

Lloyds TSB has threatened Laura Gibson, 20, of Cheltenham, with legal action to recover the debt, which began when she made a £60 purchase in September.

The purchase put Ms Gibson 8p in the red which immediately triggered a fee of £65. As Ms Gibson did not clear the overdraft she was charged a further £30 in October, £60 in December and £78 in January. Then in May, Lloyds TSB increased its unauthorised overdraft charges to a flat rate of up to £20 a day.

She said: "This whole episode has been an absolute nightmare. I've now paid more than £300 in charges but still they want more. I've stopped using the account and the way I've been treated is disgraceful."

Ms Gibson, who is enrolled to start A-Levels in September, says the stress of the charges contributed to a nervous breakdown.

"Lloyds TSB have been harassing me by telephone and by mail, putting pressure on me to pay this money back. I feel that it is morally irresponsible that the bank can charge people such ridiculous amounts of money especially when some of the charges amount to more than my income each week."

A spokesman for Lloyds TSB said: "The charges that Ms Gibson has incurred are not for a one-off unplanned overdraft position of eight pence, they relate to an unplanned overdraft of varying amounts dating back to September 2007.

"In situations where there are extenuating circumstances, such as illness, that may affect a customer's ability to manage their finances, we can consider waiving part or all of the charges that they have incurred. We will be contacting Ms Gibson again to discuss her personal circumstances."

Last week research conducted by Moneynet.co.uk, the price comparison website, found that Lloyds TSB had the most expensive overdraft charges of all the high street banks. Moneynet compared the charges incurred on an unauthorised overdraft of £50 over two weeks. HSBC had the lowest fee of £25.10 but Lloyds TSB charged £165.36, almost double the rate of the next most expensive bank.

Yesterday the Financial Services Authority (FSA) extended a waiver that allows the banks to put on hold customers' complaints about overdraft charges. The decision means that tens of thousands of customers hoping for refunds of charges will have to wait for at least another six months to learn if they will receive any compensation.

The FSA said the waiver extension should give sufficient time for the Court of Appeal to decide whether the Office of Fair Trading (OFT) has the right to determine a fair level for overdraft fees. In April, the OFT won a test case in the High Court confirming its jurisdiction over bank charges but the banks appealed the decision.

Dan Waters, Director of Retail Policy at the FSA, said: "Our objectives continue to be certainty over this complex issue, and a fair and consistent resolution of consumer complaints." Under the terms of the waiver, the banks must still consider refunds for customers in financial hardship. While the waiver is in place the Financial Ombudsman Service has agreed not to proceed with customer complaints and cases pending in the county courts have also been put on hold.

Although the waiver extension means claimants will now have to wait longer for a potential refund, it means claims can be made for charges incurred over a longer period. The rules state that customers are able to make a claim for charges incurred over the past six years. As long, as the waiver is in place, consumers can claim charges dating back to July 2001.

Louise Hanson, head of campaigns at Which?, the consumer group, said: "Lifting the waiver would actually see consumers losing more money as the clock would start ticking again on people's claims."

However, Martin Lewis, of Moneysavingexpert.com, a consumer website, criticised the FSA for siding with the banks. He said: "It's nearly a year since the FSA first kiboshed reclaiming, and people are still sitting on their hands, unable to try to reclaim money which was taken from their accounts without their permission, while the banks continue to make hundreds of millions in charges. How long are people expected to wait?"

Last week an OFT report claimed the high street banks make about £2.6 billion a year from unauthorised overdraft charges. The report also criticised the banks for the complexity of their charges as well as their lack of transparency, making it difficult for customers to compare current accounts.

Money Central: have you been unfairly charged?