Once upon a time, Banks' and Credit Card charges were subject to comparatively little regulation. They did not have to justify the level of their penalties or when they chose to levy them. They were permitted to raise charges upon charges (so if a penalty made you overdrawn, you could be penalised again for the overdraft).

Whilst banks are not required to disclose the costs they incur as a result of your unauthorised overdraft or unpaid cheque, direct debit or standing order, contract law usually demands that their penalty charges reasonably reflect those costs. Research suggests that the real cost can be £4.50 or less – so charging an average of £30 a time could well be unjustifiable in the majority of cases.