Eight high street banks yesterday opened the latest round of their legal battle over unauthorised overdraft charges, in a case that still threatens to cost the hard-hit industry billions of pounds. Lenders including HSBC, Barclays and the Royal Bank of Scotland are appealing against a High Court ruling that the fees, which have been levied when customers exceed their agreed current account balances or bounce cheques, can be assessed under unfair consumer contract regulations.

The test case, which is being led by the Office of Fair Trading, was brought after thousands of consumers challenged the charges in the county courts, complaining that they were excessive and misleading. The banks claim the charges are a legitimate fee for services rendered.