By Ian Pollock
Personal finance reporter, BBC News
Banks are "playing with words" to try to avoid consumer regulations, the High Court has been told.
Brian Doctor QC is representing the Office of Fair Trading
Brian Doctor QC, representing the Office of Fair Trading, said recent changes to the banks' current account contracts were not consumer friendly.
He was speaking on the ninth day of a test case to decide if the OFT can rule on the validity of overdraft charges.
Seven banks and the Nationwide Building Society have denied that their charges are unfair.
The OFT believes the 1999 regulations that govern unfair terms in consumer contracts give it the power to rule whether the overdraft charges are unfair.
But the lenders maintain their charges are fees levied in return for a service, the provision of which is fundamental to the operation of current accounts, and therefore the regulations are not relevant.
Both sides agreed to the test case to clarify the legal position after a mass of litigation, which has seen hundreds of thousands of consumers claim refunds totalling hundreds of millions of pounds.
Mr Doctor told the court that many banks had rewritten their contracts since the beginning of 2007.
But he said, in reality, this had made no difference to their customers.
"The receipt of all this bumph in the last year has not changed the way they enjoy or pay for the services they receive from their bank," he said.
He added that the banks had introduced "artificial notions" about charging fees in return for the provision of a service, which were "simply put in place to provide a theoretical structure to avoid the application of the regulations".
In response to a question from the judge hearing the case, Mr Justice Andrew Smith, Mr Doctor denied that the banks were simply making the contractual situation clearer to their customers.
BANK REFUNDS IN 2007
Barclays - £87m
HSBC - £116m
HBOS - £79m
Lloyds TSB - £36m
RBS - £81m
Source: Bank interim results
Could such clauses, which changed nothing about the uses of the account, be exempt from the regulations? asked Mr Doctor.
He also accused the banks of changing the wording of the contracts to avoid any language that suggested the customers might be penalised - possibly unfairly - for a breach of contract under common law.
Mr Doctor is half way through his submission to the court in response to evidence supplied by the barristers representing the eight lenders.
The hearing is expected to last until at least the end of next week, to allow the banks and Nationwide to respond to Mr Doctor's arguments.
It had originally been scheduled for eight days.
The outcome of the long-awaited court case could bring a significant change to the UK current account market.
If the OFT argument is upheld, it could mean banks and building societies having to return billions of pounds collected from customers over the past six years.
However, the losing side is expected to appeal, possibly all the way to the House of Lords, meaning the issue may not be resolved until next year.