Moneyfacts: High Court win for the OFT

Michelle Slade, analyst at Moneyfacts.co.uk, comments: "Current account customers throughout the UK will be cheering the victory of the Office for Fair Trading (OFT) over the banks.

"After a long drawn out process the OFT can now investigate these charges and customers will be hoping that the penalty they have to pay will more accurately reflect the cost to the banks of declining to pay the cheque or direct debit.

"Most of the banks appeared to have already pre-empted this loss as changes to the ways customers are charged penalty fees have already been implemented. Some banks have moved to tiering the charge levied depending on the cost of the item, while others have gone to daily charges or lower one off fees.

"The highest charge levied is from Royal Bank of Scotland and NatWest, which charge £38, max three charges per day. By comparison Barclays now charges just £8.

"Penalty charges are a significant revenue stream for the banks, which they can ill afford to lose at the moment. If the OFT does move to force the banks to lower charges, we could see increased costs elsewhere.

"With many current accounts paying little or no credit interest, the option to reduce this further as a way of paying for the penalty charges has gone. The option that some banks may now levy an account fee is a real possibility.

"Lets hope that the win for the OFT doesn't cause us all to pay an increased cost to cover the lost revenue of a penalty that was previously paid by a few."