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The judgment in the bank charges cases, which was previewed on the blog in June, is one of the most eagerly awaited decisions of the Supreme Court.  There are strong indications that the OFT will prevail against the banks, with RBS and NatWest cutting their fees and PM Gordon Brown urging an early settlement.

The case pits the OFT against the UK’s retail banks. At issue is the OFT’s ability to rule on the fairness of overdraft and bounced cheque fees imposed by banks on their customers.

The House of Lords heard the case in June and the Supreme Court’s judgment is expected in October.

Ahead of this, things are hotting up. On 7 September, RBS and NatWest announced significant reductions in their fees – see the BBC’s report here. Moreover, last week, Gordon Brown wrote to Martin Lewis of www.MoneySavingExpert.com saying that once the legal issues were resolved he wanted consumers to receive compensation as quickly as possible. The PM’s letter suggested that a negotiated settlement would be the best way forward.

The Supreme Court’s judgment will affect not only thousands of individuals County Court cases currently stayed pending their ruling, but also the liability of the banks to pay compensation running into the millions to their customers and the long term future of the UK’s “free-if-in-credit” model for personal banking.

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