This is Money - No reclaimed charges until summer 2008

Savers fighting for a resolution to the controversy over unfair bank charges may have to wait into the middle of next year before they see a return of their money.

Banks at the centre of the controversy over unfair fees will not be able to reach a compromise that will satisfy the Office of Fair Trading (OFT) before it takes them to court early next year - scuppering any chance of an early release of saver's funds - according to a senior banking figure involved in the OFT's consultation on the issue.

The OFT recently stated it could drop the High Court case it is bringing against eight High Street banks at the beginning of next year for allegedly overcharging customers on overdrafts, if the banks themselves put forward a solution to the issue.

Andy Bayes, Alliance & Leicester's head of current accounts, was one of the first individuals to be contacted over a month ago in the OFT's industry-wide consultation on how banks that charge allegedly unfair overdraft fees should be treated.

He can see no solution until mid 2008.

He said: 'I don't think they (the OFT) have clarity of what they want to do yet and I will be surprised if they come out with a clear statement before Christmas.

'If they don't have an idea now after looking at this for nine months, you have to wonder how long into next year is it going to take them to be definite? You could be looking at half-way through the year.'

A&L, which is not one of the eight banks being brought to court, provided its own solution to the issue of overcharging to the OFT. This is believed to be related to an overhaul of its own charging structure, which it will announce later this week.

Baynes said in his submission that any solution to the issue will not meet all the OFT's stated objectives of having an industry-wide template on charging that promotes more competition, is more transparent and less complex.

Transaction-based charges for overdraft facilities proportionate to the size of the overdraft are probably the fairest solution, he said, but these are extremely complex, as evidenced by bank charges in Australia.

For example, if you created a large unauthorised overdraft, you would therefore have to pay a relatively high fee.

But this may also lead to lengthy, complicated statements similar to those seen in the mobile phone market, which chart each transaction and how much you have been charged.

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