The estimated one million or so customers expecting a tasty handout from their bank following the charges court case will now have to think again, after the Supreme Court refused the Office of Fair Trading permission to judge on the fairness of overdraft charges on Wednesday. While the negative judgment came as a major surprise, the move hasn't given banks carte blanche to charge whatever they want in the future.
In fact, during the two and a half years that the case has been in the courts, the current account market has changed considerably and there are now many better deals and lower rates around, although you may have to hunt around to find them. Barclays and NatWest have slashed their unpaid fees to £8 and £5 respectively, for instance, while Santander is launching a fee-free account in January when it changes its name from Abbey.
They won't be the only ones to launch new accounts in the New Year. It's a fair bet that, by the spring, most of the major banks and building societies offering current accounts will have taken a close look at their deals. But while there will almost certainly be tempting new offers around, they are unlikely to be standalone accounts. Instead, to get the best rates, you'll have to take out another deal. That could be a mortgage – as with Santander's new Zero deal – or a savings account, a successful route followed by Alliance & Leicester, which will its change its name to Santander next autumn.
The lesson from the court case is that we don't have to accept outrageous fees. The fact that banks paid out some £60m in compensation to customers before the onset of the case shows they knew that the weren't able to get away with the widescale rip-off charges for much longer. And despite the OFT's defeat, the battle for lower charges is not over, with the OFT considering taking another run at the issue from a different legal position.
There are few people who would argue with the banks' right to charge people who break the rules and go into the red without an agreed overdraft. Let's face it, going overdrawn is not a human right, a pointed noted by The Independent's Economics Editor, Sean O'Grady, on Thursday. "It is, in effect, thieving the bank's money," he wrote. Many others support the banks' right to make the charges.
Annie Shaw, of finance website Cashquestions.com, says: "Consumers entered contracts with their banks willingly, knowing the terms and conditions. If banks had known before that they would not be allowed to make high charges for unauthorised overdrafts they might have chosen instead not to lend at all."
So the continuing argument with the banks is over the level of charges and the transparency of the system. "We have a current account market littered with an array of confusing charging tariffs, making comparison between providers almost impossible for the man on the street," points out Andrew Hagger of Moneynet.co.uk. "There's also a huge variance in the level of charges being applied. Despite the Supreme Court's ruling, it's impossible to justify charging somebody £35 to bounce their cheque."
The big question that many will want answering is: "Will I be refunded my excessive bank charges?" The short answer is no. Peter Vicary-Smith, the chief executive of Which?, says: "The outlook is bleak for anyone with an outstanding claim." However, some banks may be prepared to look at cases on an individual basis if you can prove that the penalty fees taken from you have put you in a position of financial hardship.
"If you're in financial hardship, tell your bank," advises Vicary-Smith. "They're unlikely to give you your money back, but they have to take your circumstances into account and may waive any future charges. If your bank refuses to help you, then go to the Financial Ombudsman."
He also warned to be wary of firms contacting fed-up customers with a promise to help reclaim any charges. They could simply be hoping to profit from your pain by charging you a fat fee. "We're concerned that Wednesday's ruling could drive people into the arms of unscrupulous claims handlers," says Vicary-Smith. "Beware of companies who contact you promising to get your bank charges back and never pay an upfront fee."
Still angry at the treatment from your bank? Join the Britain Needs Better Banks campaign at www.bnbb.org. And read Kevin Rawlinson's cautionary tale, opposite, to discover how banks can easily hit you another way.
Barred by the bank: 'LloydsTSB refused to believe I was me'
When LloydsTSB refused to confirm who he was, Independent reporter Kevin Rawlinson's date was ruined, and he almost lost his dream home...
I am Kevin Rawlinson. Of course, I always thought I was. It is written on both my passport and my driving licence. But I could never be quite sure until I got the thumbs up from the one person who really mattered: my bank manager.
My bank told me that my signature at 24 years old did not match the one I had provided as a wide-eyed 15-year-old opening my first account. I squirmed at the accusatory looks, the glances from card, to screen, to form, to me and back to card again. All conducted in the comfort of the foyer, in full view of the public.
It had all started a week earlier. Having found my perfect West London pad, I had written to LloydsTSB to ask it to provide a reference to my estate agent. So, as a loyal customer of around nine years, I was as surprised to hear that they had been unable to comply because of a "lack of information".
Enquiries revealed that the problem was that my signature had not exactly matched the one on the bank's records. It was not that they were not aware of me, but that they did not believe I was me. "Not a problem, I'll just update my signature," I said. "It should only take a day or two," I was assured. If only it were that simple.
It was about to get worse. That evening, I found myself in a north London bar with a young lady. I started a tab without a second thought and, with my bank card nestling behind the bar, I settled down to a lovely evening. It was towards the end of the evening that my stomach turned over. The realisation came suddenly: "If the bank has suspicions about my identity, surely that means I will not be able to use my card."
I had to explain that my card might not cover the drinks because the bank suspected I was not the rightful cardholder. My companion rolled her eyes and suggested that "if I hadn't wanted to pay I should have just said so at the beginning of the night".
I suppose I should be grateful that my bank is so vigilant. According to figures from the UK's Fraud Prevention Service, CIFAS, this year has seen a 38 per cent increase in "misuse of facility fraud" (where an account, policy or other facility is used fraudulently) on 2008. A spokeswoman for LloydsTSB insisted that the safety and security of its customers' accounts is a priority. "To this end, we have both a legal and moral responsibility to ensure that the customer we are serving is who they say they are," she said.
"There will be occasions when our records do not tie up, and although we never want to inconvenience our customers, where there is a discrepancy we will ask them to provide fresh identification to complete the transaction.
"We will then work with them to update our records for the future and our branches will always be happy to help customers through this process," she added. This effectively means that you have to fill out a form insisting that you are who you say you are and that you can accurately write your own name.
Anyone experience similar difficulties with their bank refusing to recognise their signature should submit the form required to change it as soon as possible. Or, if you can manage it, remain 15 forever and avoid the whole process altogether.