Which? has uncovered huge variations in the cost of ‘free' current accounts between banks.
Charges for going overdrawn for two days per month without permission range from £120 to £900 a year.
Even customers with authorised overdrafts will rack up significant charges with many banks, including RBS/Natwest and HSBC, charging an annual percentage rate (APR) of 19.9% - higher than many credit cards and personal loans.
First Trust Bank's Classic Account charges the most for an authorised overdraft at £185 per year.
And it's not just those in the red who are losing out. Consumers who stay in credit are also being hit through lost interest and hefty fees for withdrawing and spending cash abroad.
Under these circumstances, Natwest Select and Lloyds TSB Classic account customers who stay in credit with an average balance of £1,500 would lose out on £63 a year.
Six in ten (62%) people surveyed said they had paid a bank charge that they thought was unfair, hidden or disproportionate.
The majority of people (94%) surveyed think the banks should be more transparent about charges on their account.
The findings come in the wake of comments from the banks suggesting that the way to avoid future banking scandals is for banks to charge for current accounts, and a senior executive at the Financial Services Authority saying that regulatory intervention might be needed to instruct banks to charge for current accounts.
Which? believes that any agreement by the banks to start imposing a monthly fee would breach Competition Law and there should be strict penalties against such collusion.
Peter Vicary-Smith, Which? chief executive, said: "When some people are paying up to £900 a year in bank charges it completely shatters the myth that banking is free.
"The suggestion that banks should increase charges to avoid more scandals defies logic and is a slap in the face for consumers who are being hit hard by one of the worst financial crises in recent times.
"It's a disgrace that the very people who bailed out the banks are being asked to pay more for the most basic accounts, while the industry continues to be rocked by scandals like PPI mis-selling, LIBOR rate-rigging and IT failures.
“Banks must be far more transparent about their fees and charges so that people can clearly see what they already pay."
Which? wants the current parliamentary banking inquiry to put consumers first. There must be fundamental changes to the culture and practices of the banks, including greater transparency about the true cost of banking.
Which? wants to see all banks providing electronic information so people can clearly see how much they pay for their bank accounts and make easy comparisons between banks.
It also wants the introduction of portable account numbers so that switching banks accounts is as easy as changing mobile phone provider.
Much greater competition on the high street, is needed said Which? so that consumers can vote with their feet and the banks genuinely have to compete for customers.
And it said the new regulator the Financial Conduct Authority must clamp down on high or complex overdraft charges.