On 12 May 2010, litigation funder, IMF (Australia) Ltd (through its subsidiary Financial Redress Pty Ltd) announced that it proposed to commence class actions against 12 domestic and international banks on behalf of account holders who had been charged exception fees.
IMF has now announced the commencement of the first of the bank fees class actions against the Australian and New Zealand Banking Group Ltd (“ANZ”). The action has been filed in the Federal Court in Victoria.
While ANZ is first cab off the rank, IMF has stated that it is expected further cases against a number of the 11 remaining banks will be brought in the coming months.
What are the account holders claiming?
The account holders are claiming that exception fees are illegal because the fees represent a penalty rather than a pre-estimate of the bank’s damages. The exception fees charged by ANZ to customers consist of honour and dishonour fees on bank accounts, and over limit and late payments fees on credit cards.
It is uncertain whether the plaintiffs will succeed on this basis, which is likely to be hotly contested by the ANZ. A similar case in the UK held that there was no breach of the contract by the customer.
The plaintiffs are also claiming that the ANZ’s conduct was unconscionable or unfair within the meaning of the ASIC, Trade Practices and Fair Trading Acts. In addition, the plaintiffs will argue that the fees charged were unjust within the meaning of the Consumer Credit Code.
How many people are in the class?
IMF says that there are at least 27,199 individuals and businesses holding about 40,000 personal and business accounts in the ANZ class action.
Overall, Financial Redress has registered the holders of more than 210,000 accounts as group members to class actions against the twelve banks since 12 May 2010.
Possibly more class members will join as the class action as registrations are still open.
On 21 September 2010, the political action group, “GetUp”, announced its own campaign against bank fees and has urged its members to join the class actions.
How much are the plaintiffs claiming?
IMF says that it is estimated that the total value of the ANZ class action to date is in excess of $50 million, with an average claim being around $1,500 per account holder and the range being from hundreds of dollars to over $35,000.
The total claim is for a refund of the allegedly unfair fees paid by the account holders over the last six years (since 2004) plus interest.
Who are the other potential defendants?
The other 11 identified potential defendants are Bank of Queensland, Bank SA, BankWest, Bendigo Bank, Citibank, Commonwealth Bank, HSBC, National Australia Bank, St George, Suncorp and Westpac.
However, according to press reports, IMF has not ruled out taking action against other institutions who charge exception-type fees.
What financial institutions need to do
If you are a financial institution which charges exception fees you should review these and monitor any complaints by members or customers.
If you require more information on your legal position regarding fees or claims, please contact Bright Law.
