A couple of months ago I had a letter from Brian. He wanted to let me know that he was feeling my pain “during these challenging times”.

It was good to hear from him, even though his chosen medium – full-page advertisements in newspapers – was rather impersonal. I knew he was trying to contact me because Brian (Hartzer) was the spanking new UK retail banking chief for the Royal Bank of Scotland and I am an RBS customer.

Thanks, Brian. I didn’t know you cared. It got better. Because “fees charged for unarranged borrowing have been an area of ongoing concern for customers”, he thought it was time to cut them.

I think this means that the next time I go over my overdraft limit by a few quid, he won’t sting me with a £38 charge, plus £10 for the computer-generated letter to inform me.

Meanwhile, presumably, the bank will continue to make full use of the couple of thousand quid that often reclines briefly in my account at a certain time of the month, for which I occasionally receive a piffling amount of interest. And I can also assume that whenever I stray a quarter of an inch over my limit, there will still be a hefty monthly “maintenance fee” on top of all the other items.

RBS must have structured its new lower charges to make a decent profit. Ergo, the old charges were a licence to print money. In fact, last year the Office of Fair Trading worked out that one-third of banks’ retail revenues came from unarranged overdraft charges that were “difficult to understand, not transparent and not subject to effective consumer control”.

Why was Brian so keen to placate me when the banking sector has been a byword for shoddy customer service for years? I suspect it was more than an attempt to generate some badly-needed positive publicity. The most likely explanation is that RBS, along with the seven other banks and building societies that had taken a test case on the fairness of unauthorised overdraft charges, were expecting to lose their final appeal in the new Supreme Court. To near universal dismay yesterday, they won.

What are the implications of this ruling? First, it means that the tens of thousands of frozen claims for refunds of past charges that have accumulated since the case started in July 2007 are dead in the water. If the decision had gone in the OFT’s favour, an estimated eight million British people could have been in line for refunds.

What’s worse is that banks such as RBS that had started to reassess overdraft charges will be tempted to revert to their bad old ways.

As someone taught by my parents always to complete cheque counterfoils and know how much I have (or haven’t) in my account, I feel a bit ambivalent about this story. Part of me says that you agree to the terms when you open an account and if you break them by having insufficient funds, then you should pay the price.

I take a dim view of friends who serially abuse their credit and debit cards in the name of Jimmy Choo or Radley. Of course, for years they did so with every encouragement from banks that showered them with loan offers and unilaterally raised their overdraft limits. In fact, a pal who tried to reduce hers was advised against it by her bank because “it may harm your credit rating”. Meanwhile, though I’m happy to enjoy “free” personal banking, as a taxpayer I want RBS to make decent profits so that it can repay what it owes the Treasury.

You get a very different angle on this story from Mike Dailly, principal solicitor at Govan Law Centre, whom I caught up with at the offices of the Financial Services Authority yesterday.

Mike has spent years campaigning against unfair bank charges on behalf of clients on benefits or low pay who are often forced to make desperate choices. For instance, the day before pay day, a single mother with a part-time cleaning job had to buy shoes for her daughter because her only other ones were broken beyond repair, but the purchase put her £16 into the red. She was charged £38, plus a £28 monthly fee and interest at more than 30% per annum.

“Over the years these charges have rocketed. They are part and parcel of the banks becoming reckless in pursuit of profit and it meant encouraging customers to behave recklessly, too. When the banks are making money from the one-fifth of the population who are down on their luck, I call that morally bankrupt,” Mike said.

He even sympathised with my shopaholic friends. “The banks have been doing the equivalent of selling cheap booze to alcoholics.” Except the financial fix on offer to those

busting their overdraft limits has proved very expensive indeed.

Under the circumstances, Mike was amazingly upbeat yesterday. Perhaps that’s because he may have lost a battle but he’s increasingly confident that he will win the war. In the next few days, along with Martin Lewis of Moneysavingexpert.com and Marc Gander of the Consumer Action Group, he is briefing the leading banking barrister, Ray Cox, with a view to bringing a new case against the banks under a different section of the 1999 consumer contract regulations. Regulation 5 concerns action if there is “a significant imbalance” in the parties’ rights and obligations to the detriment of the consumer.

In yesterday’s judgment, Lord Phillips virtually invited campaigners to pursue this line. In fact, Regulation 5 sounds like a good description of the way banks have used overdraft charges to pump up profits and subsidise the cost of providing free current accounts to those who stay in the black. The banks could be facing a fresh action.

The other thing that has changed is that the FSA has taken over the regulation of retail banking and forced banks to agree to a new code of conduct that specifically includes a requirement for fairness. If overdraft charges don’t come under the OFT’s jurisdiction as yesterday’s ruling implies, then they automatically fall to the FSA.

The typical cost of a British current account (around £95), is the seventh highest in the EU. But elsewhere customers either pay a flat-rate fee or a pay-as-you-go arrangement, and one-off charges for infringements are a lot lower. Isn’t that fairer? Maybe it’s time to adopt such arrangements in Britain. As RBS chief executive Stephen Hester warned yesterday: “There is not a free lunch here.” Watch his lips. For “free banking” read “fee banking”.