Millions of current account holders stung by "unfair" overdraft charges will find out whether claims for reimbursement from the banks have any chance of success on November 25.

That is the date set for a Supreme Court ruling on the long-running legal battle between the Office of Fair Trading (OFT) and a consortium of seven banks and one building society.

So what's going to happen?

The Supreme Court's judgement will determine once and for all whether the Office of Fair Trading, which is concerned about both the size of the charges and the way the banks apply them, has the power to decide if the charges are fair or not.

Both the High Court and the Appeal Court have ruled that the OFT should be able to investigate and regulate overdraft fees in the past.

But the banks involved successfully appealed against both decisions, which is why the case now rests with the Supreme Court.

The banks argue that if the courts uphold the right of the OFT to scrutinise bank charges, they will receive a "deluge of litigation" relating to charges imposed a decade or more ago.

The cost of refunding all those affected is likely to stretch to billions of pounds, while the banks will also lose out to the tune of £2 billion a year if they are forced to cut their unauthorised overdraft fees.

Unsurprisingly, Britain's cash-strapped banks are unwilling to let this happen without a fight.

About 1 million people have already filed claims for the refund of their unauthorised overdraft charges, but these were effectively suspended in July 2007 when the OFT and the banks agreed to hold this test case.

Prior to that development, banks had already refunded about £784 million to nearly 378,000 customers.

But even if the Supreme Court rules in the OFT's favour, claimants may still have to wait to get their money back as it is only at that point that the case for and against the fairness of the charges can begin.

And if the banks win this latest appeal, customers hit by the charges are unlikely to get any money back at all.

It is not all bad news for consumers, though. The Royal Bank of Scotland (RBS)/NatWest banking group – which is now majority owned by the taxpayer – recently broke ranks with the rest of the industry by slashing its unauthorised overdraft charges.

Since October 1, people with NatWest and RBS current accounts pay just £5 if a cheque they write bounces, down from £38.

The fee for paying an item on an overdrawn account has also been chopped in half and is now £15.

However, customers of the other big banks still pay sky-high charges when they slip into the red by mistake, and consumer groups are angry that banks including RBS/NatWest continue to drag out the OFT case.

Peter Vicary-Smith of Which? said: "If RBS and NatWest truly want to get back in their customers' good books, they should admit defeat in the bank charges test case and repay the millions of pounds we believe they have been unfairly taking from their current account holders for years."