By Third Party, 22 September 2010
Page last updated at 6:47 PM 22-09-2010
ANGRY bank customers have stung the ANZ with a $50 million compensation claim alleging years of fee rip-offs.
The Federal Court action is the first shot in the nation's biggest class action against excessive penalty fees for over limit and late payments on bank and credit card accounts.
Lawyers and consumer groups said the first ANZ case, expected to be heard early next year, was a milestone that would ramp up pressure on banks to completely eliminate exception fees.
Twelve banks - including the Big Four - are in the gun over accusations they illegally gouged customers with fees ranging from $35 to $70 over the past six years when the true cost is merely cents or a few dollars.
Statements of claim will be lodged against several other banks in coming months.
"We are looking forward to obtaining justice," Maurice Blackburn chairman Bernard Murphy said.
"I am hoping we will see the end to penalty fees (and) send a message they can't get away with this any more."
More than 150,000 customers demanding refunds of at least $250 million plus interest from 210,000 accounts have already registered to take part in plans for the biggest class action in Australian history.
Financial Redress managing director James Middleweek said the mass protest had potential widespread ramifications on the way financial instititutions treated customers.
The claim against the ANZ alleges the bank breached ASIC, trade practices and fair trading laws and is guilty of unconscionable or unfair conduct.
The legal team plans to hire economists and accountants to prove the real cost to banks when customers temporarily exceed overdraft limits or make late payments is miniscule.
"It is simply unfair that ANZ Bank could charge, say $35, for going $1 over a limit on a credit card when the actual cost is negligible," Mr Middleweek said.
Many banks, including the ANZ, reduced or abolished dishonour fees last year. But critics say this was too little, and too late.
ANZ's Australian chief, Phililp Chronican, said the bank would vigorously defend the legal action.
Mr Chronican said the bank had recognised the fees were unpopular and reduced them in December.
"It's a big leap however for a fee to go from being unpopular to being unlawful," Mr Chronican said.
Furious customer John Andrews, one of three customers spearheading in the case, said he had been slugged with almost $10,000 in exception fees over several years as he struggled to cope with a loan through the global financial crisis.
The heartbroken former book store owner, who was forced to sell his business to pay off his debt, said he was often stung with fees three or four times a day for exceeding his overdraft.
"I want to get one back for the little guy," the Mt Waverley man said.
Julian Saliba, who runs a heritage renovation and extensions business, said he had been hit with fees of up to $400 a month for going over his limit, even if he put money back into his account almost immediately.
Litigation funder IMF will pick up the tab for legal fees and other costs if the bank class actions are unsuccessful, and take a 25 per cent cut if any compensation is awarded.
Mr Murphy said the class action would be seven times bigger than any other of its type in Australia.
Sourced from heraldsun.com.au
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