Over the course of their lifetimes, bank customers will each lose around £12,000 through unfair charges and poor value deals, making billions for the financial institutions that handle their cash, according to research by Which? (formerly the Consumers’ Association).

The Which? study claims that clients of the so-called ‘big five’ banks can save up to £400 every year by switching accounts, credit cards, overdrafts, loans and ISAs.

However, only 5% of bank customers have bothered to do so in the past two years. That is despite nine out of ten people who have switched banks saying that they found it to be easy.

More than one in three savers claim they are annoyed with the service they receive from their bank, and more than 60% believe their bank treats them in an unfair manner. According to figures from the financial information provider Moneyfacts, only 39% of people would recommend their bank to others.

Seventy percent of bank accounts in Britain are controlled by the big five - HSBC, NatWest, Barclays, Lloyds TSB, and HBOS.

Their dominant presence on the country’s high streets allows them to deal in services that offer value far inferior to the best available deals.

The Which? report criticises the banks, telling them they have “consistently irritated a third of customers” by selling unnecessary, “worthless” products and charging over-inflated fees for services that cost very little.

For example, a customer would be charged an average of £204 for exceeding an agreed overdraft limit of £250 by £50 on three occasions in one year. By comparison, the less popular internet bank Smile would charge only £81.

Which? also blasts Halifax, Britain’s largest mortgage lender, for charging its customers £1.50 for using debit cards abroad on top of a 2.75% charge made for all overseas transactions.

The bank is also criticised by the report for encouraging the “needless purchase” of identity theft insurance at a cost of £84 per person per year.

But it’s not just Halifax that’s guilty of oversized charges. High street banks – which in 2004 collectively reported profits of £35 billion - typically demand £50 each time they perform the simple act of cancelling, bouncing or fast-tracking a cheque.

Not all bank customers stand for the fees they are forced to pay, and some have gone as far as to take action against what they see as unfair behaviour.

One man in Twickenham, south west London, invoiced his bank for £50 after it made a mistake on his account – and he demanded another £50 when the bank wrote to complain about his first invoice. He ended up receiving payment in full.

In June 2005, law student Stephen Horne won a civil legal action made against Abbey, after taking it to court for charging him £32 every time he went overdrawn.

He claimed that during a six-year period he was made to pay around £2,000, which he claimed was in breach of official consumer contract regulations that states consumers should not have to pay a disproportionately high amount of compensation if they fail to meet obligations.

Consumer groups welcomed the court’s decision to find in favour of Mr Horne and said that the way could be opened up for thousands more similar legal claims.

For further information see the UK Net Guide features on Switching Banks and Introduction to Internet Banking.