Law firm sues the big banks on fees
After landing a blow on ANZ Bank, law firm Maurice Blackburn is now suing the rest of the big four banks and Citibank for slugging customers with hefty fees.
Australia’s largest ever consumer class action got bigger on Friday, when Maurice Blackburn filed proceedings in the Federal Court against Commonwealth Bank, Westpac, National Australia Bank and Citibank.
The move comes 11 days after the court ruled that late fees of $35 or more charged on credit cards by ANZ might be illegal.
The class action now represents 150,000 customers for claims worth almost $200 million in total.
Analysts say the amount is immaterial for the banks.
The law firm is also alleging that fees imposed upon customers for overdrawn accounts, as well as honour and dishonour charges do not reflect the actual processing cost to the banks.
Litigation funder IMF said Westpac boss Gail Kelly had admitted the $35 to $45 fees were ‘completely inappropriate’ and the big banks had already reduced or stopped the fees.
‘(But) that’s only half the story,’ IMF managing director for financial redress, James Middleweek, told reporters on Friday.
IMF is working with Maurice Blackburn on the issue.
‘If someone keeps hitting you on the head and then stops, it isn’t quite enough and it would be nice if customers eventually could get some return for the behaviour that was described as completely inappropriate,’ Mr Middleweek said.
The fact that 150,000 people were aggrieved enough to complete documentation to sue the banks was a ‘bellwether’ of how customers felt towards the institutions, Mr Middleweek said.
‘It’s quite humbling, the goodwill that this case has generated among customers,’ he said.
‘You get people saying you can have all the money, I don’t mind, just take the banks on.’
The class action has not been a total success for the bank customers so far, with Justice Michelle Gordon finding that honour fees, dishonour fees, overlimit fees and non-payment fees were legitimate charges for services provided by the bank.
Maurice Blackburn will appeal that decision.
ANZ chief executive Mike Smith said on Friday that the bank would continue to resist the claims.
He denied that the 38,000 ANZ customers in the class action was a large number.
Maurice Blackburn head of class actions Andrew Watson said he also had smaller banks in his sights, such as the Bendigo Bank and Suncorp, which were still charging what he termed exorbitant fees.
Citibank was part of the current class action because of the recent success achieved on credit cards against ANZ and because it was continuing to charge a monthly $40 overlimit fee and a weekly $10 late fee.
‘These class actions are about bringing fairness to tens of thousands of Australians, from mums and dads to small business owners, who have all been hit with exorbitant fees from the major banks,’ Mr Watson said.
The actions were being funded by litigation funder IMF (Australia) on a no-win, no-fee basis.