The Supreme Court is expected to announce its verdict in the case between the UK's financial institutions and the Office of Fair Trading (OFT) tomorrow, in a ruling that could see consumers claw back billions in bank charges.
The case has revolved around the fairness of unarranged overdraft charges, and has spanned over two years, including appeals by the banks.
Should the court rule in favour of the OFT, the body will then be free to judge what can be considered a fair bank charge
Consumers are keen to be refunded what they consider to be overzealous fees charged for overstepping the limits of their overdraft. Charges of £25 or £30 have been billed to accounts for going 50 pence above an overdraft limit, for instance.
Almost one million complaints have been filed by consumers so far, with all cases postponed until a ruling is reached. It is estimated that many more complaints will be made if the court rules in favour of the OFT.
Should this happen, the body is expected to announce its findings at the beginning of 2010, potentially allowing bank customers to see their charges refunded.
However, there are fears that the banks could appeal again, dragging the process for even longer, thus increasing the time that customers can be charged interest on existing penalties.
The banks are loath to give up their right to impose such charges, as it represents a significant revenue stream for them. Should they eventually lose the case, it has been suggested that consumers can expect to see the banks deriving funds in other ways, such putting an end to free banking.
This could be implemented through charging to set up direct debits or paying a set fee for withdrawing money at a cash point, for example.
A precedent to this has been seen recently, with revenue lost in the credit card market through penalty fees met with increased interest rates and other fees.
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