A court has ruled that some late fees on credit cards charged by Australia and New Zealand Bank (ANZ) were “extravagant, exorbitant and unconscionable.”
However, Justice Michelle Gordon of the Federal Court of Australia also ruled that some fees were reasonable, making the verdict only a partial victory for consumers.
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Andrew Watson, from law firm Maurice Blackburn, representing 43,000 ANZ customers in court, said: “Today is, on any analysis, a huge victory for the customers of the ANZ, for the customers of all Australian banks and for consumers generally.”
“This will be a significant victory for those customers, but also for all of those customers who are involved in the other seven class actions we have against other banks and financial institutions, and in terms of the principles it establishes, a significant victory for Australian consumers everywhere.
Watson added: “Wherever there are other late payment regimes, they will need to be examined carefully as a result of this decision.”
The class action against ANZ first began in September 2010 and is only one of a series of class actions brought against a total of eight banks by Australian consumers.
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By GlobalDataLawyers for the consumers claimed that banks charged as much as A$45 ($40) on charges that sometimes cost them as little as 50 cents to administer.
Watson said: “Her Honour found that the costs to the bank in most instances were 50 cents, in a few instances they were higher than that, in one instance it was $5.50 – so that gives you some indication of the scale of the difference.”
ANZ CEO Philip Chronican said he was pleased the court had said that some fees, including honour, dishonour, over-limit and non-payment fees, were fair.
He said: “We’ve consistently been of the view that, while these fees have attracted some attention and at times are unpopular, we believe that they were legal and a legitimate fee for service and the Federal Court has agreed with that.”
In relation to late payment fees, he added: “The implications of today’s decision for ANZ and its customers are still far from clear and it is likely to be some time until this matter is finally resolved.
“Ultimately this is an issue about our customers. What we’ve been working hard to do over recent years is that we build a fair relationship with our customers and we listen to feedback,
“As a result of that, in 2009 we reduced a number of fees, 27 fees were abolished, we reduced the overdrawn and dishonour fees and we lowered the late payment fee which is the one at issue today from $35 to $20 and removed these fees altogether for account holders that were recipients of government benefits.
“So while I don’t think today’s judgment is the end of the matter, it is clearly a significant step forward and one that hopefully gets us closer to having this issue resolved and put behind us.”
Maurice Blackburn has also issued proceedings against Citibank, Commonwealth Bank, National Australia Bank, Westpac, St George, Bank SA and BankWest.
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