End is nigh for free banking as OFT ruling looms

THE UK faces an end to free banking this week, as the Supreme Court makes its final ruling over whether customers have been unfairly charged on their overdrafts.<br /><br />The government has piled the pressure on banks to settle the matter quickly rather than appeal, and millions of customers could be eligible for a payout after Wednesday&rsquo;s legal decision. A ruling against the banking industry from the Supreme Court could cost the institutions &pound;6bn in reimbursement charges.<br /><br />Banks insist the overdraft fees, which generate an estimated &pound;3.5bn&nbsp; each year, enable them to provide free services like ATM withdrawals and cheque payments, and argue thatmoney lost through payouts will have to be clawed back somehow.<br /><br />The court is set to rule on whether the Office of Fair Trading (OFT), who brought the case against Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Clydesdale and Yorkshire banks, Royal Bank of Scotland and Nationwide Building Society, can look into the legality of overdraft charges.<br /><br />Banks can charge hundreds of pounds when customers go over an agreed limit, despite claims that the administrative cost to the banks is as little as &pound;4.