Bank fees class action

Registrations to join in the NAB unfair bank fees class action closed on 27 January 2015.

On Tuesday 18 November, Justice Jacobson in Sydney’s Federal Court, approved orders to help facilitate settlement negotiations in the bank fees class action against the National Australia Bank.

The orders opened the doors to any NAB customers who had been charged exception fees, enabling them until 27 January 2015 to register to participate in any agreed settlement.

NAB has publicly indicated its commitment to exploring settlement opportunities, and we welcome NAB’s common-sense approach in exploring the resolution of the bank fees class action against it.

Status of initial class action

On 5 February 2014, her Honour Justice Michelle Gordon of the Federal Court of Australia handed down judgment in the case of Paciocco v ANZ, in which she found that late payment fees were unlawful penalties and that customers should be reimbursed the money by which those fees exceeded the true cost to the bank, with no retrospective time limitation on the claims. However, her Honour found that other fees, including honour and dishonour and overlimit fees, were not unlawful. An appeal from that decision was heard by the Full Court of the Federal Court in mid-August. A decision is still pending.

In order best preserve the rights of all claimants, on Tuesday 12 August 2014, Maurice Blackburn filed the first of several open class actions against a series of banks for charging late fees. These claims were filed against Westpac, St. George, BankSA, Citibank and ANZ.

The firm plans to extend the action to cover nine financial institutions in all, including CBA, NAB, BankWest and American Express. The result will be that all customers who have ever been charged late fees by these organisations will be eligible to share in an eventual successful outcome, should the class actions prevail.

History of the bank fees case

Maurice Blackburn issued proceedings in the Federal Court of Australia against the ANZ bank in September 2010 in the first of a series of bank fee class actions for repayment of fees they have charged their customers over the last six years. These fees include honour and dishonour fees on bank accounts, as well as over limit fees and late payment fees on credit cards.

Maurice Blackburn subsequently issued closed class proceedings against Citibank, Commonwealth Bank, NAB and Westpac (16 December 2011), St George and BankSA (1 February 2012) and BankWest (18 April 2012).

More than 185,000 Australians who were charged these unfair fees by the banks have signed up online to be part of the action to redeem their money plus interest, with the claim size now estimated at more than $240million. This is by far the largest collective legal action in Australia.

The class actions are funded by IMF Bentham, on a 'no win no charge' basis. This means that IMF Bentham covers all the legal costs and only gets paid if the cases are successful. Bentham IMF Limited also agrees to meet the banks' costs if the cases are unsuccessful. There is no cost to class action participants unless they successfully recover money.

In 2012 ANZ group members had an important victory with wide-ranging implications for Australian consumers, when the High Court ruled on a preliminary question of law that all the exception fees in question could be considered as a penalty charged by ANZ.

Her Honour Justice Michelle Gordon of the Federal Court of Australia handed down judgment in Paciocco v ANZ on 5 February 2014, in which she found that late payment fees were unlawful penalties and that customers should be reimbursed the money by which those fees exceeded the true cost to the bank, which her Honour found in most cases to be $0.50. However her Honour found that other fees, including honour and dishonour and overlimit fees, were not unlawful.

On 8 April 2015 the Full Court of the Federal Court reversed Gordon J’s finding that ANZ late fees were penalties. That decision has been appealed to the High Court of Australia.

For more information about the bank fees class actions, go to www.financialredress.com.au. Financial Redress is a wholly owned subsidiary of IMF Bentham.

Registrations for the class actions are closed until further notice however if you are an existing registered group member please address any queries to Financial Redress on 1300 4 REDRESS (1300 473 373).

Please note: Maurice Blackburn is aware that scammers have been contacting people and asking for payment and bank account details in order supposedly to process refunds due from exception fees paid. Anyone who receives a call asking for this type of information should be wary. The calls appear to be designed to extract money or information from people fraudulently. Neither Maurice Blackburn nor Financial Redress ask anyone for such information over the phone, nor demands such advance payments.

Owing to the number of bank customers participating in the cases, please do not telephone our office as we will be unable to deal with your enquiry. Please call 1300 4 REDRESS (1300 473 373).