01.Five banks challenged over late payment fees
A huge class action over unfair late credit card payment fees launched by Maurice Blackburn Lawyers today is set to benefit millions of Australians if successful.
Maurice Blackburn has initially filed the class action against Westpac, St George, Citibank, BankSA and ANZ but intends to extend the case to cover the Commonwealth Bank, NAB, BankWest and American Express.
The case follows on from the firm’s success earlier this year when the Federal Court ruled that ANZ’s late credit card fees were unlawful because they were a penalty rather than a legitimate cost for the bank. The court found that handling late payment fees usually only costs the bank around 50 cents.
Unlike the case against ANZ which was a closed class case, where customers had to sign up to be eligible for refunds, this is an open class case. This means that if successful, all customers who’ve ever been charged a late fee on their credit card from one of the banks listed in the case will have a right to some compensation.
This latest action is based on the success of the ANZ case which ruled around 43,000 customers be refunded any amount charged in late fees that was in excess of the true cost to the bank, with no retrospective time frame imposed.
While the ANZ case was good news for those affected by credit card fees, the case was only a partial win for consumers as the court also ruled other fees, such as honour, dishonour and over limit fees, were not unlawful.
ANZ is currently appealing the decision that it refund around 43,000 customers late fees charged over the past six years, with a court listing for 18 and 19 August.
“Whilst that judgment is under appeal we think we have a very strong case and that this course of action provides the best safeguard for the rights of all those consumers affected by late fees.”
In 2010 banks charged Australian households $652 million in exception fees while the big four banks posted a combined profit of $24bn in 2011, according to figures from Maurice Blackburn.