Banks have been accused of trying to block compensation claims from customers, after they refused to accept the findings of a High Court test case on penalty charges.

Consumer groups fear that the banks will appeal against yesterday’s ruling, which allows the Office of Fair Trading (OFT) to press ahead with an inquiry that will establish once and for all whether bank charges are unfair. An appeal would delay the cases of hundreds of thousands of customers who are trying to reclaim fees after going overdrawn or missing payments.

Phil Jones, of the consumer organisation Which?, said: “The banks should concede defeat, agree with the OFT what constitutes a fair unauthorised overdraft fee and refund their customers as soon as possible. If they drag out the case, customers will keep being charged and be powerless when they make a complaint.”

Adam Phillips, of the Financial Services Consumer Panel, said: “Consumers have been left in the lurch with complaints about bank charges for long enough. The banks should not seek to stretch out the arguments by going to appeal over this judgment.”

The banks have until May 22 to decide whether to appeal. As they struggle with their own financial problems — as evidenced by Royal Bank of Scotland’s announcement of a £12 billion rights issue to cover a potential £5.9 billion write-down on its assets — the banks are thought unlikely to accept a judgment that could lead to billions of pounds being reclaimed.

If the OFT concludes that the charges are unfair it could cap fees at a much lower rate than the £30 typically charged, costing the banks an estimated £10 billion more.

The banks have an incentive to draw out the process because the Financial Services Authority (FSA) is permitting them to put claims on hold until the judicial process is completed.

Tens of thousands more cases brought in the county courts or with the Financial Ombudsman Service have also been suspended, pending a final judgment.

The British Bankers’ Association said that it was too early to give a response to the judgment, but an industry insider said that there was likely to be an appeal “against some level of the judgment”.

Campaigners fear that the banks’ delaying tactics could spell disaster for some families. Households short of cash are more likely to run up bank charges and potentially have most to gain if the OFT investigation allows them to reclaim the fees.

National Debtline said that 52 per cent of the calls it had received over the past year were from people seeking advice on bank charges. Beccy Boden-Wilks, of the charity, said: “Most people who come to us for advice have incurred overdraft charges and we always advise them to claim back the last six years’ worth of fees from their banks. Many low-income earners are forced to occasionally dip into their unauthorised overdraft, but as the cost of fees mounts up it just compounds their debt problem.”

Penalty charges are incurred for unauthorised overdrafts, bounced cheques and clearing direct debits when there are insufficient funds in the account. In some cases, charges are levied for every day an account is overdrawn, while interest also builds up if customers do not address the debts.

If the banks do appeal, the case could drag on for years, although the FSA has the power to restart the claims process.

David Black, principal consultant of banking at the financial services analyst Defaqto, said: “An idea of how long this could take is given by the four years it took to conclude the legal dispute over whether overseas credit card transactions are covered by the protection of Section 75 of the Consumer Credit Act.”

Angela Knight, chief executive of the British Bankers’ Association, denied that the banks were putting profits before customers by appealing against the High Court judgment. She said: “This judgment, which contains important points for both the banks and the OFT to consider, marks the first stage in the test case process. Further court hearings will be required before the case is concluded.”

Called to account

£10 billion The cost to banks if they are forced to cut overdraft fees

1 million Number of people awaiting refunds on charges

£713 million The amount those 1 million could reclaim

£784 million The estimated cost of out-of-court settlements to customers who have reclaimed bank charges over the past two years

£111 The amount banks make every second from overdraft charges

Source: Times database

Paul Owen, a sales assistant from Manchester, is trying to claim £4,500 in bank charges from Barclays through the courts, but he is still waiting for a refund after his case was put on hold.

Mr Owen, 31, usually goes overdrawn by about £200 each month, and over the years the charges have added up.

In January 2007 he went on to the Moneysavingexpert website and downloaded a template letter to claim back his bank charges after reading about other customers who had successfully done the same.

When Barclays turned down his claim he was determined not to give up and decided to take his case to court. By the time his case was due to be heard, the courts had been told that they should put all cases on hold.

He said: “I’m really annoyed that I’m being forced to wait for a judgment. Until I get a refund of the charges I can’t deal with my debt problem.”

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