By Ian Pollock
Personal finance reporter, BBC News
The new Supreme Court will soon rule on overdraft fees
The UK's banks have been asked how they are preparing to repay their customers if they lose the legal test case on the fairness of overdraft charges.
The banks were sent a questionnaire in August by the Financial Services Authority (FSA).
It asked them what plans they had to make sure that repayments could be made "effectively and swiftly".
The Supreme Court will soon rule on whether or not the OFT can decide if bank charges are fair.
That decision may not be the end of the legal test case, which started in July 2007.
If the OFT's authority is upheld, it could lead to a second round of court hearings about the actual level of fees that might be regarded as fair.
But the FSA is anxious to ensure that the banks are ready to pay up, should they eventually have to do so.
The existence of the questionnaire was revealed after a freedom of information request was submitted to the FSA by the campaign group Legal Beagles.
"Due to the amount of fine detail required by the questionnaire, it can only be interpreted as a sign of the inevitability of the charges having to be refunded," said Nick Spooner of Legal Beagles.
The questionnaire, which asked for replies to be made by 19 September, focused on how the banks will deal with the 1.2 million people whose demands for refunds have been frozen since the summer of 2007.
The FSA's questionnaire went to the 28 banks that have had most complaints against them about their overdraft fees.
The regulator's covering letter said the answers would "enable the FSA to develop best practice recommendations for the industry".
"This includes making preparations for dealing with relevant charges complaints... and updating those preparations as the outcome of the test case becomes clearer."
The questions ask what contingency plans the banks already have in place, including:
• what steps they intend to take in the future
• how they will collect the data needed to work out who might be paid compensation
• how they will calculate the sums involved
• how they will tell customers if a payout is due
• how the money will actually be paid
• whether the banks will need outside help, especially if there are many new complaints
• and if senior staff are in charge of planning for any refunds.
If the OFT wins the test case, it could lead to many more people demanding the return of past overdraft fees, a sum that could run into billions of pounds for the industry.
The FSA acknowledged that its questionnaire was the first of its kind on this issue.
But it stressed that the underlying requirements for banks to plan for a redress programme had been in place since 2007.
That was when the FSA first gave the banks permission, under a "waiver" from its normal rules, to park any new complaints until the test case is over.
That year, an estimated £784m was paid to nearly 378,000 customers by the UK's banks as they sought to stem the tidal wave of complaints by settling out of court, rather than by defending their overdraft fees in county court hearings.
In September, the part-nationalised RBS-NatWest broke ranks with the rest of the industry and decided to slash its overdraft charges.