Australia's major telcos are about to face a massive class action over their late payment fees.

Hot on the heels of a court ruling that found late payment fees by banks to be extravagant and unconscionable, lawyers now have Australia's big telcos in their sights.

To begin with, millions of Telstra's fixed line, mobile and data customers will be able to join the class action.

They will be followed by customers from Optus and Vodafone.

"The law in Australia is that late payment fees are penalties and therefore are unenforceable," said Steven Lewis, the principal of ACA Lawyers.

He says the claim could be worth hundreds of millions of dollars, with the action being announced just days after Telstra turned in a $4.3 billion annual profit.

"Just by way of example, in 2014 Telstra took in $272 million late payment fees and what they call other miscellaneous fees. We believe the vast majority of that amount relates to late payment fees," he said.

"If you go back over the last five years, Telstra has recovered close to $750 million in late payment fees and other miscellaneous fees."

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Mr Lewis says the law requires late payment fees to be a reasonable estimate of the actual costs to the company of paying late.

"The law in this country says that if you charge a late payment fee, unless it's a genuine pre-estimate of the loss to the company caused by the late payment, then it constitutes a penalty and can't be enforced," he explained.

Mr Lewis says such fees have generally increased steeply over recent years.

"Currently Telstra charges a late payment fee of $15 on any bill over $70. That doesn't matter if your bill's $100 or $1,000, they charge $15, and it doesn't matter if it's a day late," he said.

"Optus charges a $15 late fee and Vodafone charges a $10 late fee.

"Over the years Telstra has increased their fee from $5 up to $10."

Millions of customers over many years

Mr Lewis says the claim could cover many years' worth of late fees.

"Normally you can make a claim going back six years. However, where customers can show that they've been paying the fee not knowing what the law was and paying that fee by mistake, then there's no limitation period and conceivably the claim can go back to when these fees were introduced in 2000," he explained.

Mr Lewis says it is conceivable that the claim could cover millions of customers.

"Telstra have got a staggering number of customers. They've got 16 million mobile customers, 7.5 million landline customers, and nearly 4 million data customers," he noted.

"So the claim is in respect of all customers who have been charged late payment fee over the years."

Mr Lewis says he is confident that the case against the telcos is strong, and their defences weak.

"The only real defence they can mount is the fact that in their view that the late payment fee is a genuine cost to them and represents their true cost," he said.

"Now they would have to lead evidence of that, but we know from the bank case that the true cost to the banks in similar situations was a very, very small amount, and it'd be very hard to see a company the size of Telstra justifying a $15 fee on a $70 bill."

The class action is expected to be lodged in the Federal Court by the end of the year.

Telstra says it will review the claim but believes late payment fees are reasonable in light of the costs incurred and will strongly defend any claim.