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Big banks could be forced to reimburse more than $ 55 million to their customers, after the Federal Court found that ANZ Bank had charged “extravagant, exorbitant and unreasonable” late payment fees on
credit card.
The ruling also raises doubts about the fees telecommunications and utility companies charge customers who fail to pay their bills on time.
In a decision that could affect tens of thousands of customers, the Federal Court found Wednesday that late payment fees charged by the bank were illegal, while four other types of fees were legitimate.
Some 43,500 customers have challenged ANZ in a multi-million dollar class action lawsuit, alleging that some charges were illegal because they exceeded the cost to banks of customers who discovered their accounts or missing refunds.
Justice Michelle Gordon ruled that most of the fees charged by the bank were legitimate, but its late payment fees of up to $ 35 were “extravagant, exorbitant and unreasonable.”
The case against ANZ has wider ramifications as it is being used as a model for a class action lawsuit of 185,000 people against major lenders, including Commonwealth Bank, Westpac, NAB and Citi, which its supporters say could be worth more than $ 220 million. It is billed as the largest class action lawsuit in Australian history.
The finding paves the way for customers to take action against any business with a late payment scheme, including telecommunications and energy providers.
It also waives ANZ’s six-year statute of limitations, meaning anyone who has ever been billed late fees by ANZ can now claim those fees.
“Wherever there are other late payment regimes, they will need to be carefully considered,” said Andrew Watson, national head of class actions for Maurice Blackburn.
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