Bank fees class action fight hits the High Court today

14 August 2012
Maurice Blackburn Lawyers, backed by litigation funder IMF (Australia) Ltd, will today take the fight against unfair and excessive bank fees all the way to the High Court of Australia, in a bid to recoup more than $220 million in unfair bank fees for everyday Australians.

In what is the country's biggest series of class actions, the High Court fight represents an ambitious battle that could result in a significant development in Australian law benefiting all consumers and affecting banking contracts right across the country.

Maurice Blackburn class actions Principal Andrew Watson said the High Court action represented an important moment in this case.

"This is a hard-fought contest, and a complex argument dealing with principles of English law stretching as far back as the 12th century," Mr Watson said.

"We have a strong case to make at the High Court today and we intend to continue taking it up to the banks to help hundreds of thousands of everyday Australians get back money we believe they shouldn't have had to pay," Mr Watson said.

The case will essentially come down to an argument about the development and application of the doctrine of penalties.

"We say the law should focus on the reality of the fees charged rather than allowing the banks to hide behind complex wording to avoid the doctrine of penalties," Mr Watson said.

The class actions are being funded by IMF (Australia) Ltd, on a no-win no-fee basis for participants. New claimants can still register for the actions through IMF's subsidiary Financial Redress at www.financialredress.com.au.

IMF (Australia) Investment Manager, James Middleweek, said the class action was an important exercise in giving people an opportunity to take on the might of the banks.

"With cost of living pressures continually increasing, these are the sorts of unfair fees that can send people and small businesses over the brink," Mr Middleweek said.

"At least one bank chief executive has already admitted that these charges were completely inappropriate. Yet two years after we started, not one bank has done anything to compensate customers. Redress is long overdue."

Mr Watson said the class actions against unfair bank charges are the largest in Australia's history - claiming more than $220 million for fees charged to 170,000 customers from eight banks.

History

  • 22 September 2010: First bank fees class action filed against ANZ
  • 5 December 2011: Justice Gordon in the Federal Court finds that late payment fees are capable of being penalties, but finds for ANZ on other fees
  • 16 December 2011: Class actions filed against Commonwealth, Westpac, NAB and Citibank
  • 22 December 2011: Maurice Blackburn appeals adverse findings in Justice Gordon's December judgment
  • 1 February 2012: Class action filed against Westpac subsidiaries St George and BankSA
  • 18 April 2012: Class action filed against Bankwest
  • 11 May 2012: High Court grants leave to appeal Justice Gordon's judgment of 5 December 2011
  • 14 August 2012: High Court hears appeal from Justice Gordon's judgment of 5 December 2011

Estimated claim size

Bank

Group members

Estimated claim size

Range of fees charged

ANZ

38,000

$50m

$20 - $45

BankSA

1,500

$2m

$20 - $45

Bankwest

6,600

$10m

$10 - $50

Citibank

10,000

$15m

$7 - $50

Commonwealth

45,000

$56m

$20 - $35

NAB

30,000

$38m

$25 - $60

St George

9,000

$14m

$20 - $45

Westpac

30,000

$38m

$30 - $50

TOTAL

170,100

$223m

 

General information

  • Banks charged Australian households (that is, not including businesses) $652 million in exception fees in FY2010, down from $1.3 billion in FY2009 and $1.2 billion in FY2008
  • Banks charged Australian businesses $112 million in exception fees in FY2010, down from $197 million in FY2009 and $209 million in FY2008
  • Banks earned $4.2 billion in fees (all fees, not just exception fees) from households in FY2010, a drop of 16% from the previous year
  • Banks earned $6.9 billion in fees (all fees, not just exception fees) from businesses in FY2010, an increase of 13% from the previous year
  • The big four banks posted a combined profit of $24 billion for FY2011

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