How the test case outcome affects you

• Credit Charges

There’s an awful lot riding on the outcome of this case, and not just for anyone who has ever written a cheque that has bounced or breached their agreed overdraft facility.

Thirty pounds. That’s what the average bank will charge you if you go over your overdraft limit.

The fees are intended as a punishment but they’ve also proved profitable, generating up to £3.5bn for the banks every year.

If the High Court verdict goes against the banks they may have to give that money back.

There are the seven banks and one building society – the Nationwide – involved in this test case.

They argue their charges are perfectly legitimate and easily avoided if customers manage their money properly.

The Office of Fair Trading argues these are not “service” charges but “penalty” charges.

Under consumer laws it argues banks are entitled to charge such a fee but that it should be proportionate.

Does it really cost the bank £30 to bounce a cheque? Some experts have estimated the cost could be as little as £2.50.

The banks have always insisted their charges are fair but until this case began last July they tended to pay-up when faced with legal action.

Take the Royal Bank of Scotland Group, which owns Natwest.

According to its most recent annual report, in the first half of 2007 it gave back £119m to customers who contested penalty fees.

Chris Warner, an in-house lawyer with Which?, feels anyone who has lodged a claim with their bank will have to wait a little while yet to find out if they will get their money back.

“There will be appeals”, he says “this saga will drag on for some time yet”.

Marie Cope is happy to bide her time. She says she breached he overdraft several times by a matter of pence and was charged £120.00 by Barclays.

She is a full-time carer for her son and her husband earns £15,000. Every single penny counts for them.

The outcome of this case could bring an end to free banking in the UK.

Banks are already writing off billions of pounds of bad investments linked to the US sub-prime crisis.

Now they have lost this case, they may have to hand back billions more to customers.

But it’s a fair bet the banks will find a way to make good their losses.