In one of the most anticipated rulings in recent history, the Supreme Court has today rejected the two year ongoing battle aimed at banks unauthorised overdraft borrowing fees that can be as high as £35 per transaction. The ruling has come as a surprise to many as the Office of Fair Trading had won the last two court hearings in the High Court and it was widely anticipated that this judgment would go in their favour. This spells bad news for the over one million consumers who effectively have had their overdraft claims ‘frozen’ while the trial was ongoing.

The case was extremely important for both consumers and the banks as it is estimated that the annual income earned on overdraft fees alone is in the region of £2.6 billion. If the case had gone the other way it would have taken consumers one step closer to being entitled for a refund on their overdraft charges which could have run into the billions. This would have been a hefty blow for the banks, many of whom are still trying to get back to normality after the credit crunch which caused many to be placed in government hands.

An important point to note is that the Supreme Court has not made a ruling on whether the charges are fair. Rather only suggested that overdraft fees were a core part of the current account and therefore could not be judged for fairness under the Unfair Contract Terms in Consumer Contracts Regulations 1999.

Is the game over for consumers? Well no, customers, or potentially the OFT may still be able to lodge a new case against the banks. On a brighter note, we have recently seen a High Street Bank introduce an account with no unauthorized overdraft fees which may suit a variety of individuals and ensure that you are not caught up in this situation again.