In a blow to consumers, the Full Federal Court has overturned the original decision that credit card late fees charged by ANZ were unlawful.

Last February, in a landmark case in the Federal Court, Justice Michelle Gordon ruled that ANZ's late payment fees were unlawful because they were a penalty rather than a legitimate cost for the bank. The decision meant customers of the bank were entitled to have any fees reimbursed, and paved the way for a series of other class actions over bank fees. 

ANZ currently charges customers $20 for late credit card payments, while the Federal Court's initial ruling found that handling late payment fees usually only costs the bank around 50 cents. 

However, in an unfortunate turn of events for consumers, the original decision has now been successfully appealed by ANZ.

Case to go to High Court

Maurice Blackburn Lawyers, the firm heading up the class action on behalf of the 43,500 ANZ customers, has vowed to take the case to the High Court.

National head of class actions at Maurice Blackburn, Andrew Watson, said that while they are "still digesting the details", based on what they have read so far, they believe there are grounds for appeal.

"Our concern is that the way [in which] the Full Court has approached matters, it has in effect rendered the doctrine of penalties and statutory provisions on which we rely as empty vessels. And that's what we'll be taking to the High Court," said Mr Watson.

The exact case that will be taken to the High Court is not yet decided. For five years Maurice Blackburn has been arguing that the exception fees charged by banks – such as the credit card late payment fees, as well as honour, dishonour, and over-limit fees – are extravagant, unconscionable and unfair.

While the late fees on credit card payments were originally deemed unlawful in the Federal Court, the other exception fees weren't deemed to be penalties and therefore fair.  

Maurice Blackburn appealed this decision at the same time as the ANZ appeal; however, the Full Court overruled its appeal with this latest decision.

Maurice Blackburn has 28 days from the Full Court's decision to decide what aspects of the case it can take forward to the High Court, and it is currently trying to establish whether it will challenge all of the exception fees or just the late payment fees.

Back in 2010 CHOICE started fighting against the issue of unfair bank fees, such as exception fees, as part of our Better Banking campaign.

Outcome to affect other class actions

In addition to the class action against the ANZ, Maurice Blackburn has also opened class actions against seven other banks including Westpac, St George, Citibank, BankSA, Commonwealth Bank, NAB, and BankWest.

The good news in all of this? If the action is ultimately successful, Mr Watson said, "because of the way we've instituted these proceedings, every banking customer of every one of the banks we've sued, who's ever paid a late payment fee is covered by the case".

These cases have all been "stayed awaiting the outcome of these proceedings", said Mr Watson. However, he didn't foresee any change to those cases as a result of the latest decision in the Federal Court.

The class actions stretch to more than 185,000 consumers with a claim size so far of more than $240m.

Perhaps unsurprisingly, ANZ has welcomed the decision to uphold its appeal on late credit card payments.

ANZ CEO Australia Mark Whelan said: "Our long-standing position has been these fees were lawful and we're pleased this has been vindicated by the Full Federal Court. We were particularly pleased the Court found there was no dishonesty on ANZ's part and these avoidable fees were fairly and fully disclosed and there was no lack of good faith by ANZ".