More major Australian banks could face massive payouts in the tens of millons after the Federal Court today found ANZ charged customers excessive fees on late payments.
The Commonwealth Bank, Westpac, NAB, BankWest, Citibank, St George and BankSA all have had class actions filed against them.
The Federal Court today ruled the customers be compensated for amounts unfairly charged by the ANZ Bank. The payout, which will take several weeks to calculate, will run in the tens of millions of dollars.
Lawyers Maurice Blackburn, which started the class action in 2010, say the judgment by Justice Michelle Gordon sets the scene for seven other major Australian banks which have similar class actions awaiting them.
“This decision opens the door for the excessive amounts charged on late payment fees to be recovered from other banks,” says Andrew Watson, who heads Maurice Blackburn’s national class actions practice.
The court found the ANZ charged fees for late payments constituted a penalty which banks were not allowed to impose.
The bank’s fees of $20 and $35 exceeded the bank’s true costs of dealing with late payments – ranging between 50 cents and $5.50 – by up to 7,000 per cent.
The judgment also determined that late payment fees charged more than six years ago could be claimed and were not barred by the statute of limitations.
“This aspect of the judgment alone will significantly expand the banks’ liability to customers,” says Watson.
“This has been a long tough fight, but today the people that stood up to the banks have had an important victory.”
Justice Michelle Gordon ruled in favour of customers regarding late payment fees, but upheld the bank’s arguments on honour, dishonour and over-limit fees.
The class actions are being funded by Bentham IMF (Australia) Ltd, on a no-win no-fee basis for participants.