Current account providers are to appeal a court ruling over overdraft charges that looked set to allow consumers to reclaim billions of pounds, it was reported today.
Last month, a high court judge ruled that the charges came under the Unfair Terms in Consumer Contracts Regulation 1999, paving the way for the Office of Fair Trading (OFT) to challenge current fees.
According to the OFT, banks receive up to £3.5bn a year in unauthorised overdraft fees - nearly £10m a day.
They charge up to £39 for a bounced cheque, standing order or direct debit, and critics of the system say this does not reflect the actual cost incurred by the banks, which could be as little as £2.
Consumers had hoped that the ruling would lead to a cap on the fees and allow them to reclaim excess charges paid over the past six years.
However, a report in today's Financial Times said the seven banks and one building society involved in the test case against the OFT were planning to appeal Mr Justice Andrew Smith's ruling.
It said the OFT was unlikely to contest any appeal, which will see the case referred to the appeal court.
A court hearing is due to take place tomorrow during which the OFT and the eight organisations involved in the case - Barclays, HSBC, Lloyds TSB, the Royal Bank of Scotland, HBOS, Abbey, Clydesdale and Nationwide building society - will announce their decision.
The British Bankers' Association and individual banks involved in the case refused to comment on the report, saying they would make statements after tomorrow's hearing.
Prior to last summer, more than 1m reclaim letters were downloaded from websites, and in some cases customers were able to win back thousands of pounds from the banks, who refused to contest the claims in court.
Around £500m is so far thought to have been repaid.
However, since the test case was announced the Financial Services Authority has allowed all current account providers to put complaints over charges on hold.
Adam Williams of the consumer group Which? said he hoped the banks would accept the ruling as an appeal was unlikely to reach court before the end of the year.
"Every second that passes is costing consumers money," he said.
"Although the complains have been put on hold, the banks are still allowed to charge the fees."
