Banks ''win'' latest stage of penalty charge case

The overdraft charges levied by many large banks between 2001 and 2007 should not be allowed to be challenged by customers through common law, a High Court judge has said.

Mr Justice Andrew Smith''s decision marks the latest stage of a long-running legal test case, brought by the Office of Fair Trading (OFT) to decide whether or not it can rule on the charge''s fairness.

Hundreds of thousands of people claimed their "excessive" penalty charges back from banks prior to the case being called last summer.

After which, all ongoing claims were put on hold pending Mr Justice Smith''s final verdict, due in the new year.

The latest decision is a setback for consumer campaigners.

Barclays, one of the banks affected, welcomed the news.

"It is now clear that neither Barclays past charges nor those in force in January 2008 are unenforceable penalties," it commented.

"We continue to work with the OFT and to participate in the court case that started in January this year. We hope for an early resolution and one that gives clarity for consumers and banks alike."