On Thursday the UK’s major banks received the news that they had been dreading for many months – the judge presiding over a recent High Court test case into bank charges had ruled against the banks and in favour of the Office of Fair Trading, which could see the banks lose billions of pounds, as they repay past charges to millions of consumers. Justice Andrew Smith, who presided at the January High Court test case, has given the OFT the power to rule on the fairness of these banks charges, which have been applied for unauthorised overdraft use, bounces cheques, and returned direct debits.

The decision from the judge was welcomes by campaign groups, who have been fighting against these charges for years. One official from the consumer campaign group Which? said: "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."

However, banks are not giving up just yet by the sounds of it. Angela Knight from the British Banker’s Association said: "We need to take what the judge has said very carefully and not jump to conclusions. This is the start of a process." The banks have been given until 22nd May to lodge an appeal against the ruling, and all pending cases in the courts will be kept on hold until after this date.

The decision by the judge means that the OFT could slash the maximum bank charge in the same way as it did with credit cards fees two years ago, and this could mean losses of billions for the UK’s major banks. However, there are now concerns over how banks will try to claw back the lost revenue, with many predicting that they will start charging monthly fees for current accounts.