Customers wanting to reclaim their bank charges scooped a huge victory last year when the High Court ruled that bank charges are subject to unfair terms and conditions rules, but the banks subsequently appealed this decision – the result of which is expected tomorrow.

If the courts rule in favour of the consumer again this week, then it will mark another important step for the reclaiming bank charges campaign.

Since 2006, when the Office of Fair Trading first suggested that the charges customers incur for exceeding their authorised borrowing were unfair, thousands of customers have reclaimed their money from the banks, but thousands more claims are on hold, awaiting a decision.

In 2007, the Financial Services Authority (FSA) put a waiver on reclaiming bank charges until the test case comes to an end, so that all customers are treated consistently.

The test case began more than a year ago, instigated by the Office of Fair Trading (OFT) and eight of the high street banks to bring clarity and consistency to the much argued issue.

If tomorrow’s decision goes the way of the consumer, it “could be a big leap towards reopening the reclaiming doors for millions”, says Martin Lewis, founder of ‘consumer revenge’ website MoneySavingExpert.com.

While a positive result of the appeal will not mean that victory for consumers is a certainty, as it could be appealed again in the House of Lords, it is still an important step, Mr Lewis said.

The test case will not even determine whether or not the charges are unfair but it is intended to determine whether or not they are covered by law.

The fairness of the charges has been left to the OFT to decide upon; it is widely expected that they will conclude that they are unfair, as they have done all along, and try to reach an agreement with the banks.

It is unlikely that the decision tomorrow will have any effect on the FSA waiver on reclaiming bank charges, which said when it renewed the hold again in January that it would last for six months or until the test case comes to a conclusion.

Most people are prevented from getting their money back by the waiver, unless they are deemed to be in particular financial hardship.

Martin Lewis of the opinion that the waiver “should’ve been lifted after the first court victory, but now it’s likely that, until there’s a firm answer on whether charges are unfair, the FSA will continue to protect the banks.”

With regards to continuing to claim, he said that “If you’ve not put in your claim then there are already 100,000s queuing, so the sooner you get it in, the better.”

© Fair Investment Company Ltd