Here you go this is what I sent them just tweak for your needs. Think it is ok to send LBA as well if not someone will correct me.
Customer Relations Department,
1234 Pavillion Drive,
Ref your recent offer
Thank you for your recent offer of £ ***** as a gesture of goodwill, I must inform you that I will not be accepting this offer. As outlined in my earlier correspondence I explained that the charges you have applied to my account are contrary to the Unfair Terms in Consumer Contracts Regulations 1999. Further or in the alternative, I believe that your charges are a Penalty.
Penalty charges are irrecoverable at common law. The precedent for this was Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor co Ltd  AC 79.along with Murray v. Leisure play  EWCA Civ 963
Although in my original letter I informed you that I would start legal proceedings within 14 days, as a gesture of goodwill I will give you an extra 7 days to refund £ ***** by cheque as I no longer use this account and wish it to be closed. If this is not done within the 7 days, I will be forced to start legal proceedings, you will receive no further warnings.