OFT to investigate bank charges

British consumers stand to be reimbursed by billions of pounds, after the high court today ruled that the Office of Fair Trading (OFT) should be able to decide whether or not overdraft charges are lawful.

Mr Justice Andrew Smith, who presided over the case, ruled that overdraft charges came under Unfair Terms in Consumer Contracts Regulations and should be investigated by the OFT.

The UK's biggest banks receive around £10 million per day in unauthorised overdraft charges, the Guardian reports.

Bank charge campaigners have welcomed today's news and hailed it as a victory for British consumers.

Doug Taylor, a personal finance manager at consumer organisation Which?, told the BBC: "The banks should do the right thing now and concede defeat, agree with the OFT what constitutes a fair unauthorised overdraft fee and refund their customers as soon as possible."

Several banks have been forced to refund customers over the last year, including HSBC, which paid out £116 million, and Barclays, which returned £87 million.