Money
Managing your money
Banks told to stump up for bank charges
Britain's top banks have been forced to pay out hundreds of millions of pounds to customers who have won back "unlawful" bank charges by threatening court action
As a result, the banks along with the Office of Fair Trading (OFT), decided to take matters to court.
Some nine months after the test case was announced, the judge this week ruled that the OFT could take control of fees which can cost up to £39 for the likes of exceeding overdraft limits or having insufficient funds to pay cheques or direct debits.
Simeon Linstead at uSwitch.com, said: "The decision paves the way for a further hearing in which the court will decide whether the charges are unfair and, if so, what a fair charge should be.
"However, let's not get too excited as this is the very first stage in, what could be an extremely long process. In reality, this will take years not months to conclude.
"Make no mistake, banks will fight this battle tooth and nail, especially given the current economic climate and its impact on the UK banking industry."
Current account customers have been stung for an average of £750 each - according to uSwitch.com.
But until the case is concluded, those with complaints still in the pipeline are going to have to wait until the case is finished to hear if they are to get any of their money back.
The city watchdog has put a freeze on banks and complaints handlers dealing with complaints until the courts have issued a judgment. The Financial Services Ombudsman has also suspended work on claims.
The test case was launched by the Office of Fair Trading (OFT) and the eight current account providers - Abbey, Barclays, Clydesdale, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland Group.
Default charges brings in billions of pounds for these banks, and experts warn that if they are eventually forced to stop charging at current levels, customers will pay in other ways.
Linstead said: "Ultimately, all consumers will have to pay the price for people that do not comply with the terms and conditions of their current account and could end up having to pay for every banking transaction carried out."
Campaigners say the fees should reflect only what it costs the bank to deal with. Some argue this is as little as £2.50.
* Written by Holly Thomas. Holly is an award-winning financial journalist and Deputy Personal Finance Editor at the Daily Express and Sunday Express. Holly's views represent her own opinions and are for general information only. Always seek independent financial advice.
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