Class-Action ANZ Bank Fees Lawsuit Could Expand to Other Banks
Tuesday 3 December 2013 @ 1.32 p.m. | Trade & Commerce
The current $57 million class action lawsuit involving 43,500 ANZ customers against the ANZ bank could expand into a multibillion-dollar claim against the nation's banks, a lead lawyer in the case says. The case began on Monday and is the first of eight class actions involving 185,300 members of eight lenders claiming $243 million.
A Federal Court hearing over three weeks will resolve whether the bank's fees of $25-$45 for over limit, late payment and other issues were illegal and unconscionable penalties disproportionate to the financial institution’s actual costs.
According to lawyers in charge of what is planned to be Australia's largest ever consumer class action, the nation's banks claimed approximately $5 billion in such fees in the six years before 2009 when public pressure led NAB to initiate a drop in fees .
A key argument before Justice Michelle Gordon will be whether or not the banks' fees can be called penalties.
Maurice Blackburn's class action head Andrew Watson said contract and fair trading laws only allowed a party such as a bank to impose a fair fee amount; penalties are prohibited.
Should the court find that the fees constituted illegal penalties, a precedent may be set applying to potentially millions of bank customers hit by years of fees could benefit according to Mr Watson.
"That is a huge issue that will constitute a precedent not just for the banks that we've used but for other financial institutions who are levying similar fees and exceptions charges."
Although Mr Watson said the firm was currently only focused on the banks and confident it had a strong case, the class action could also set a standard for other industries. Making previous fees difficult to justify will be evidence that NAB no longer imposes such fees and ANZ only charges about $6 said class action funder IMF's investment manager James Middleweek.
He said while the fees have been reduced, many banks still over-charge customers now, three years since the class action was first initiated. For example, over-limit fees for credit cards can be up to $40 if the credit card was taken out before last year despite the fact new laws that banned those fees, he said.
ANZ has said little, only announcing that it will robustly defend the case, claiming it is entitled to impose the fees on customers. ANZ reported a record profit of $6.5 billion cash for the year to September 30.
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