ANZ hit with $50m class action over fees

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ANZ hit with $50m class action over fees

By Adele Ferguson

The ANZ Bank is the first of 12 banks to be hit with a class action after allegedly wrongfully charging its customers hundreds of millions of dollars in penalty fees over the past six years.

The claim against ANZ, which is estimated at $50 million, will be filed in the Federal Court this morning.

But the $50 million claim could go higher, according to litigation funder IMF, which is bankrolling the class action on a no-win, no fee basis.

It is the first of 12 class actions to be lodged against the banks, in what promises to be the biggest class action in corporate history.

The legal action against ANZ and the other 11 banks has attracted 210,000 banking customers who believe they have been systematically stung with exception fees on their accounts from local and foreign banks.

The average claim is around $1500 per account holder, with the highest claim as high as $35,000. The total claim is for a refund of these unfair fees paid over the last six years (since 2004), plus interest.

The class action facing ANZ involves three lead applicants and 27,199 individuals and businesses which together hold 40,000 personal and business accounts.

The other banks yet to be served with a writ in the alleged wrongful and unfair overcharging include National Australia Bank, Westpac, the Commonwealth Bank and BankWest.

The Reserve Bank of Australia revealed last year that banks charged exception fees of almost $1.2 billion in the 2008 financial year. No figures are available before 2008 but litigation funder IMF, which is bankrolling the class actions, estimates it could total more than $5 billion over six years.

Class action law firm Maurice Blackburn, which is representing the plaintiffs, alleges that charging these exception fees is illegal and that the Bank’s conduct was unconscionable or unfair within the meaning of the ASIC, Trade Practices and Fair Trading Acts.

“We will argue that fees charged were unjust within the meaning of the Consumer Credit Code,” Maurice Blackman chairman Bernard Murphy said.

The legal action is being funded on a "no-win no fee" basis by litigation funder IMF Australia and managed by its subsidiary Financial Redress.

Financial Redress boss, James Middleweek said in a statement that until recently the banks were deducting $1.2 billion a year in unfair exception fees.

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“In the court of public opinion, these unfair, excessive fees were already proving indefensible by the banks, so much so that some banks, including ANZ, were forced to reduce or abolish them from late last year,” he said.

Exception fees typically include four types of penalties customers have been slugged with by the banks. They are honour fees, which are generally a penalty fee of $40 incurred when a customer overdraws on a bank account or exceed an agreed overdraft limit and the bank pays it out; dishonour fees for cheques that bounce; late payment fees for credit cards or loan accounts, and fees for overdrawing on a credit card. These fees typically range between $25 and $60 on each transaction.

aferguson@fairfaxmedia.com.au

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