ANZ class action: 38,000 customers take bank to Federal Court over fees

Updated

The largest consumer class action in Australian history begins in the Federal Court in Melbourne today as 38,000 ANZ customers appeal over the bank's fees.

Law firm Maurice Blackburn is taking the action on behalf of ANZ customers, with the court set to examine whether the fees are fair or whether they are excessive and therefore illegal.

A High Court decision last year paved the way for the trial in the Federal Court.

Maurice Blackburn has the financial backing of publicly listed litigator IMF.

Andrew Watson, the head of class actions at Maurice Blackburn, says the fees are not an accurate reflection of the costs faced by banks when customers are caught out.

"The fees range, but $25 to $35 is the sort of range for fees that are imposed, so you might be a dollar over on your account or a day late in your payment and the banks will slug you with a fee that's out of all proportion to what it costs them for that minor transgression," he said.

"We think it's worth [in total] about $50 million, but overall we're running a case for 170,000 bank customers against eight major banks, and that's worth about $220 million."

Mr Watson says this is the first of the cases to go to trial.

"It's been a long, hard fight over the last three-and-a-half years," he said.

"We've been to the High Court and back, and now it's time for ANZ bank customers to have their day in court.

"The fact that the banks have dropped some of their charges is a good thing and to be welcomed, but even then, some of those fees are still too high and are still the subject of this action."

ANZ customers hope to win back overdue fees

Fork lift driver Tim Hardman is one of the 38,000 people to sign up to the class action.

The 34-year-old was an ANZ customer for six years, during which time he racked up more than $700 in fees.

Bank fees class action explained Maurice Blackburn claims bank fees, such as dishonour fees and late payment fees on credit cards, constitute a penalty rather than a fee for service

The class action alleges the bank charged exorbitant fees of between $20 and $45 for services that would only cost a matter of cents or a few dollars to administer

The action is the largest in Australia's history, with 38,000 people signing up and a claim size of about $50 million

"Most of my bills were set up with direct debits, just the same as your wages go in as a direct credit," Mr Hardman said.

"Yet the ANZ likes to process their withdrawals first, and then they like to process their deposits later in the day.

"Quite often as much as I tried to line up my direct debit payments with when my pay goes in, there were a few times where it was only a matter of hours when my account would be overdrawn to pay a bill and then my wages goes in later that night, yet the ANZ likes to charge people overdrawn fees, or honour fees, as they like to call it."

Mr Hardman says he is hoping to get most of his money back through the class action.

"I feel it's unreasonable and unsubstantiated for banks that make billions and billions of dollars profit every year to then charge the average customer $30 a pop in some cases for a simple overdrawn amount which could only be overdrawn for two or three hours," he said.

"Thousands of people are standing up together to say: 'Listen banks, this is just ridiculous'. Australians should be proud to say: 'This is enough'.

"So if we all stand up and say this isn't right, then maybe we'll get something done."

Bank fee challenge could have wide implications

Dr Wayne Courtney from the University of Sydney law faculty has been monitoring the case since the High Court ruled last year that the bank fees are open to challenge.

He says the court case has caught the attention of other large companies.

"I know at the big end of town, some of these large institutions [are] quite worried about the effect it has on the certainty of contracts," he said.

"If you say X company who provides power wants to charge, say, a $20 admin fee when the bill's paid late, I think that's created some concern at that end of town because they're now worried about whether they can justify those fees.

"So I think it has the potential, I suspect, to reform some sort of structuring of fees in consumer contracts generally."

Dr Courtney says the outcome of the case could have an effect on the contracts of other companies.

"For a long time, large institutions engaged very capable lawyers to draft around certain basic protections the law provided in respect of charging very large amounts of money when a consumer or some other party to the contract happened to breach the contract," he said.

"What's really got people interested is together with these sort of High Court developments last year, plus this new legislation, it opens up a lot more of that sort of stuff for challenge.

"And I think on one side you've probably got the consumers groups saying: 'Great, we're sick of being charged these ridiculous nice round number fees for no real reason'.

"[Against that] some of these large institutions at the big end of town, they're quite worried about the effect that has on the certainty and predictability of their contracts."

ANZ declined an interview request ahead of today's class action.

The Australian Bankers Association said it was inappropriate for it to comment, because it has not been involved in the case.

Do you know more? Contact investigations@abc.net.au

Topics: banking, courts-and-trials, law-crime-and-justice, industry, business-economics-and-finance, melbourne-3000, australia

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