'Unfair' bank charges ruling delayed

Bank customers may have to wait years to find out whether current account charges are ruled unfair.

A judge has given banks permission to appeal a ruling against them, making a delay look inevitable.

Five weeks ago, the High Court ruled in favour of the Office of Fair Trading (OFT), allowing the consumer affairs watchdog to press ahead with an investigation into whether banks can legally charge customers who slip into the red without prior agreement or who write a cheque that bounces.

That potentially paved the way for current account holders to reclaim billions of pounds in fees.

But at a meeting to set the timetable for the next steps, Mr Justice Andrew Smith indicated that he would allow the banks to appeal at least part of his ruling, which relates to the rights of customers to sue banks.

Other aspects of his initial ruling are still being considered.

Peter Vicary-Smith, chief executive of consumer group Which?, said the move was a "real kick in the teeth for consumers as it just drags out the whole process".

He said: "It'll be at least another year before people start to get their money back, during which time the banks will hit us with up to £3.5 billion in overdraft charges.

"The banks should do the right thing now, throw in the towel and start reimbursing the customers they've been overcharging all this time."

If the banks do appeal, the case could go to the Appeal Court and the House of Lords before the full case goes to court, which could take two years or more.

In the first half of 2007, Britain's biggest banks refunded more than £400 million.

But several disputed whether the charges, typically between £24 and £39 per unauthorised overdraft, came under the OFT's remit, triggering the legal dispute.

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