Well thank you for the photos and clarification. If all of your items could get into those two bags then there should have been no problem, and indeed the bit I've quoted above would appear to be how this happened. You should be commended for your light travelling abilities, this would definitely had fitted inside the Saab too without causing grief to other passengers.

I doubt it would ever happen again, as FrancisA pointed out we often get repeat questions on issues that crop up time and again, and I can't ever recall a case like this on the forum. So it seems to me to be a one-off unlikely to happen again (particularly now you know how these fares work).

I would ring Customer Relations during UK office hours. You can fax the photos in, the number should be in the Contact Us section of your BAEC login, just attach the customer relations incident number, your BAEC number and PNR, and after a few days the customer relations agents should see it on their screen when you call in, their document management system is linked up for this (or it should be, it sometimes doesn't work). If that doesn't work, write in a letter with the photos, adding in a line at the end requesting the refund of the £65 or you will "need to take further steps elsewhere to obtain the refund".