HEY, BARBARA. SEE YOU IN COURT
It was in 2009 when we first found out that Australian banks were making almost $1 billion in penalty fees from consumers.
Up until then the banks had refused to disclose the information.
The report released by the Reserve Bank of Australia also found that it was households bearing the brunt of unfair penalty fees, paying $961 million – nearly 83% of them.
Since then the fees – for overdrafts, overdrawn accounts, dishonoured cheques, over-the-limit credit card accounts and late payments – have been coming down.
But consumer activists say the banks are still charging too much. Much, much more than is warranted and that’s led to Australia’s biggest-ever class action, now underway in the High Court.
Andrew Watson from law firm Maurice Blackburn is heading up the case on behalf of 170,000 bank customers against all of the nation’s major banks.
Mr Watson argues the fees are unfair.
“The distinction really boils down to are they a fee for a service? We say they’re not. Or are they a penalty? That is something that’s designed, in effect, to punish the customer,” he said.
“And we say they are penalties and that they’re out of all proportion to the cost to the bank.”
The High Court appeal against the ANZ Bank is a test case being financed by litigation company IMF Australia which takes on cases where the claim size is more than $5 million. The company is paying for the lawyers and will cover costs if the case is lost. But it also charges fees, about 25 per cent of any winnings.
If the fee-paying customers win, lawyers hope all banks will have to pay back $220 million.
The hope is that if banks lose their case, that the fees will be cut, or even abolished.
This is a case all Australians should be watching with interest.
Today The Hoopla wants to know… what are the bank fees and charges that really get up your nose?
Have you ever pursued a charge with a bank that you thought was unfair?
What was the result?