Taking this definition of fraud from the Serious Fraud Office:
It is deception because the consumer credit agreements state that on default the bank can charge “reasonable costs” or “costs on an indemnity basis”, neither of which allow them to add a straight 16.4% to the debt immediately on default. Which is why the OFT told the bank to stop adding the charges or amend their agreements appropriately. So that is false representation and failure to disclose information.
It is also abuse of position – solicitors are instructed to add the charges, writing the first letter to the debtor including a 16.4% charge. People without legal knowledge will assume that they have to pay the charge.
So, classic fraud. And that despite the fact the solicitors breach a number of sections of the Solicitors Act, which also makes the charges illegal.