ANZ gets a partial win in bank fees case

Tuesday, December 6th, 2011

The Federal Court has struck out part of a bank fees class action brought  by consumers against the ANZ.

The claimants have alleged that certain bank fees charged by ANZ are illegal penalties under Australian law.

Some 34,000 consumers, who compose the unprecedented class action, are represented by law firm Maurice Blackburn.

In a preliminary ruling, Justice Gordon dismissed arguments in relation to honour fees, dishonour fees, non-payment fees and overlimit fees. Her Honour found that these fees were charged for tangible services provided and not “penalties”.

“The law says that where a fee is charged for what is in effect a breach of a contract, that is a penalty. Where such a penalty is charged that penalty cannot be extravagant or unconscionable”, says Andrew Watson of Maurice Blackburn.

The claimants argued that such fees bear no resemblance to the cost to ANZ of those events.

Justice Gordon, however, considered that credit card late fees might arguably be a penalty. A trial will held on that issue in February 2012.

Andrew Watson claims the ruling as a winner.

“It’s one great leap for Australian consumers,” Mr Watson says.

“The fees that we’ve won on in relation to late payment on credit cards, they’re the bane I think of most of our existence. You’re a day late on the payment of the minimum amount and you get slugged with this ridiculous amount of money that bears no relationship to the fact that you were a fraction late in the payment of whatever amount was due.”

ANZ, however, says that 4 out of the 5 claims have been dismissed and this represents a very positive outcome for the Bank.

“Our consistent position has been that while some of these fees may have been unpopular, we believe they were lawful and we’re pleased this has been largely vindicated in today’s ruling,” said ANZ chief executive Australia Philip Chronican.