BANKS have refunded more than £559m in “unfair” overdraft charges over the past year.

The payouts came to light in the annual results of the majority of banks involved in the High Court test case over current-account charges.

The final tally is likely to be higher as Abbey and Nationwide have so far declined to disclose how much they have refunded.

Since July banks have stopped all repayments while the test case goes through the courts. A judgment is expected next month but the case could drag on until July or even later, according to consumer group Which?

Banks are thought to make £2 billion£3.5 billion a year in fees charged when customers go into unauthorised overdraft or a cheque bounces.

Consumers were able to claim back up to six years worth of charges – an estimated total of £10 billion£21 billion.

Under current rules, banks can charge only what it costs them to process an overdraft or a bounced cheque. Banks can levy penalties as high as £39, but campaigners claim the actual cost to banks is as little as £2.50.

Which?, the pressure group, says you should not be put off by the repayments freeze as an application must be acknowledged when it is handed in. A spokesman said: “By putting in an application now, you avoid missing out on payments if some of the charges you paid fall outside of the six-year limit. It is especially important if the test case looks like it will drag on.”

The HBOS group, which includes Halifax, has faced the biggest payout to customers, refunding a total of £122m.

Royal Bank of Scotland group, which includes high-street bank NatWest, has paid out £119m to date, while Barclays has paid out £116m and HSBC has refunded £115m.

HSBC estimates it will have to shell out a further £303m in refunds to its British customers.

The other banks involved declined to predict the total liability they would face.

Lloyds TSB refunded £76m to customers before the test case began and Clydesdale and Yorkshire Bank said claims and costs, as well as provisions for future administrative costs relating to the issue, totalled £11m.

The test case was bought jointly by the seven banks and Nationwide and the Office of Fair Trading to settle the issue after consumers began to reclaim millions of pounds through the courts.

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