“The Banks welcome the judgment that the Court has issued today on the first stage of the test case relating to unarranged overdraft charges,” said the BBA in a statement, “The test case process was initiated by the Banks, with the OFT, to bring clarity to an issue which is of concern to a large number of bank customers.”

The decision today means that the issue of unfair bank charges can be assessed under the Unfair Terms in Consumer Contracts Regulation (UTCCR) 1999, but does not make any judgment on whether the charges themselves are fair or not, and the BBA wants to emphasise that fact.

“The Court has emphasised in the judgment that the question of whether the Banks’ charges satisfy the fairness requirement of the UTCCRs has not been determined by the Court,” said the statement, “That is a question that can only ultimately be decided by the Court and not, for example, by the OFT.”

Consumer groups have also welcomed the ruling, but are being very cautious, well aware that there is still some way to go.

Kevin Mountford, head of current accounts at moneysupermarket.com says today’s decision was a good one for the consumer, but warns that the issue is far from being settled.

“After many months of uncertainty, the Office of Fair Trading is now free to intervene on overdraft charges, setting what it feels is a fair rate,” he said.

“However, this will be a complicated and lengthy process, and consumers should not expect to know their fate for a long while yet. It is also likely that the banks will appeal, further delaying the saga,” he said, and warned, “We know one thing for sure; banks will not take this lying down and will find other ways to maintain profits regardless.”

Simeon Linstead, Head of Personal Finance at uSwitch.com is slightly more confident, and says that although consumers will have to wait for a further court case to determine whether the charges themselves are fair or not, today’s ruling is one step closer to a consumer victory.

“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,” Mr Linstead said.

“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.”

But David Kuo, Head of Personal Finance at Fool.co.uk is far more confident, urging consumers to keep fighting.

“For two years Fool.co.uk has deemed unauthorised overdraft charges to be excessive and unnecessarily punitive,” he said, “we are therefore pleased that justice has been done.”

Mr Kuo continued “We urge banks to cooperate with the OFT, and we also hope they will not challenge today’s verdict.

“Appealing today’s judgment will prolong the pain unnecessarily for disadvantaged customers. It is cruel to make customers wait another nine months or more to recoup what is rightfully theirs,” he said, and urged customers who have been unfairly penalized to continue to reclaim unfair bank charges.

“There is a six-year limit for reclaiming the charges,” he said, “though the clock stops the moment you lodge your complaint with the court. Customers should not delay.”

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