Bank customers will be watching with interest as a test case which could pave the way for a ruling on how much lenders can charge for unauthorised overdrafts gets under way.

The Office of Fair Trading is bringing the High Court challenge against seven leading retail banks and the Nationwide building society.

The OFT is set to argue that overdraft charges come under the scope of the 1999 Unfair Terms in Consumer Contracts Regulations, and if the judge rules this is the case, the court could then decide at a further hearing what a fair charge should be.

An OFT spokesman said: "It means (if we win) that we can go back to the court with new evidence from our banks market study and start to talk about whether and what a fair amount should be."

At the moment the charges can be implemented if customers take out an unauthorised overdraft or breach their authorised limit.

And customers can also find themselves incurring the costs if they make a payment but have insufficient funds in their account to cover it, or if a payment is stopped by a bank because the account holder does not have enough money.

It is widely believed that banks make somewhere between £2bn and £3.5bn a year in fees charged when customers go into an unauthorised overdraft, and while customers can be hit with charges which can be as high as £39, campaigners claim that the actual cost to banks is actually nearer the £2.50 mark.

The hearing is an attempt to resolve the legal issues surrounding the heart of a wave of mass litigation which has swept the country over the past two years.

Back in November, the OFT accused the banks of charging customers more for unauthorised overdrafts than it cost to provide them, and it also claimed the charges mean customers are given credit on "uneconomic terms" in which the fees are "disproportionate" to the amount of money borrowed.

But the banks have attempted to justify the charges by claiming they reflect a service the bank provides to the customer.

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