ANZ Bank customers have won a major victory against the bank in their attempt to recover million of dollars in unjust fees.
In a Federal Court ruling handed down earlier this year, the ANZ Bank was slammed for charging its customers fees for late payment on credit cards, which were considered by the Court to be "extravagant exorbitant and unconscionable". The class action involving 43,500 ANZ customers sought to prove the bank's late fees were in fact unfair penalties.
The decision has been hailed as a landmark case.
The Court heard that the bank has been charging its credit card customers up to $35 for late payments, when the typical cost to the bank of handling late payments is anywhere between 50 cents and $5.50.
Four other of the bank's fees (including honour, dishonor, non-payment and over limit fees) were also challenged, but the Court held that those charges were legitimate and only took issue with the late payment charge. Justice Michelle Gordon ruled that the bank's late payment fees were illegal and that the fee constituted a penalty far beyond the actual cost recovery levels.
The Court ruling has left ANZ facing the need to pay affected customers millions of dollars in refunds and reductions in fees paid. The Court held that a time limit for fees charged did not apply, so that there is no telling how far back refunds can be claimed for unlawful credit card late payment charges.
The controversial decision raises doubts about the validity of fees charged by other banks and telecommunication and utility providers. It is likely that any business charging late fees will now come under the spotlight.
ANZ has indicated that it will take some time to realise the cost of the Court's decision and that it intends to appeal the Federal Court's decision. The Bank's actions following the decision will no doubt be closely watched by the other leading banks.
Consumers are urged to ask for refunds or reductions in fees charged if they are being charged what they consider to be unreasonably high late fees.
At the very least, consumers should be contacting relevant companies and asking that they explain how the fee is made up and how it relates to the actual costs it has incurred as a result of the late payment.
If an unsatisfactory response is given, the complaint should be referred to an ombudsman.