PUNK band manager Graham Pearce is living proof that ordinary people in Worcestershire can take on the banks and win.

Mr Pearce is getting back thousands of pounds in bank charges after exploiting a legal loophole popularised on the Money Saving Expert website.

Mr Pearce, aged 41, from Harpley, near Clifton upon Teme, has won his fight to get £7,035 back from HSBC after he took his case to Northampton County Court.

His bank has yet to pay him the money - and has now written to tell him it is closing his account as of Monday, July 9, after making "a commercial decision to withdraw banking facilities".

He registered the claim with the court in May after visiting www.moneysavingexpert.com which provides template letters for people to fill in and a step-by-step guide to claiming back the cash.

The website, set up by Martin Lewis, says banks dare not challenge claims in the High Court because it could set a precedent for millions of claims if they are on the losing side.

Mr Pearce, who manages his own punk band, Nomad 67, said he was not a bit surprised the bank had chosen to close his account but said he was looking forward to "getting one over" on his bank by calling in the baliffs if the bank does not pay out.

Mr Pearce, who feels let down by HSBC after more than 20 years as a customer, said: "I'm a rebel against authority and the banks are robbers in shiny suits. A lot of people brought up in a punk background will only stand for so much.

"All the big banks treat people wrongly and the power of the banks is totally wrong. They think they can walk all over people."

Although it costs banks money to pay back charges, it would cost them even more if the High Court rules against them, says Mr Lewis on his website.

He also says banks do not wish to reveal their costs in court because it could put them at a commercial disadvantage, another reason for them not fighting the claims.

One of the central arguments against bank charges is that they are not proportional to the work involved.

It doesn't cost a bank the £35 it charges a customer to send them an automated letter telling them they have gone over their overdraft limit.

How to make a claim

Penalty charges can be incurred for unauthorised overdrafts and unpaid items such as cheques, direct debits or standing orders. These are also known as returned or bounced items. You can claim the last six years of charges, or five if you live in Scotland.

The pitfall of making a claim is that some banks have threatened to close the accounts of people after they have claimed back their charges.

1. Set up a parachute bank account' in case the bank closes your account when it pays out the money. The Financial Ombudsman ruled against banks doing this but many still do it.

2. Send a request to your bank for a comprehensive list of past charges which you have a legal right to under the Data Protection Act. To save time enclose a cheque for £10 which covers the cost of the application.

3. Sample letters for claiming with and without interest are available on www.moneysavingexpert.com.

4. Threaten court action if the request is rejected, deemed invalid or does not receive a response. If you want a faster settlement, you can offer to take less money if the claim is settled quickly.

5. Go to the Small Claims Court. Claims should be kept under £5,000 so they are classed as small claims - make several separate claims if necessary. If the bank does not pay, bank customers can call in the baliffs once the court has ruled in their favour.

Be warned - the banks are all fighting back

THE banks have recently fought back, seizing on a court victory in Birmingham to persuade customers to drop their claims.

A district judge in Birmingham unexpectedly found in favour of Lloyds TSB in May when it defended a claim for a £2,545 refund. Other banks are now using the ruling to fend off claims, including Abbey, which has denied acting improperly. A county court judge also threatened to strike out claims by 20 bank customers who are suing for the refund of overdraft charges.

District judge Ian Besford said the claimants were unlikely to succeed because of the case in Birmingham, which was quoted as a precedent.

The legal position for bank customers is therefore increasingly unclear but Marc Gander, a spokesman on bank charges for the Consumer Action Group, said the Birmingham case was lost because of a lack of evidence. Stephen Gerils, who speaks for district judges in London, said the number of cases relating to bank charges was "unprecedented" and said all sides should let the matter reach the Court of Appeal so there is a test case.