Banks, like their wealth management businesses, are under pressure over fees as law firm Maurice Blackburn launches a class action over penalty fees charged to clients.
The scrutiny over fees in financial services has widened, with 12 major Australian banks facing mass legal action over penalty fees in a cluster of potential class actions announced yesterday.
Proposed defendants in the class action include the big four banks Australia and New Zealand Banking Group, the Commonwealth Bank of Australia, National Australia Bank, and Westpac and St George. Also included are Bank of Queensland, Bank of South Australia, BankWest, Bendigo Bank, CityBank, HSBC and Suncorp.
Class action law firm Maurice Blackburn said it would conduct legal action that would be funded on a no-win no-fee basis by litigation funder IMF Australia and its subsidiary Financial Redress.
A statement from Maurice Blackburn said action against the banks had stemmed from charges made against clients who had gone over their credit limit or made late payments on credit cards, as well as those with dishonoured cheques or who had cheques over their limit honoured.
It said the proposed class actions would allege that charging such exception fees was illegal because these fees penalised the customer for breaching a term of the contract, when by law, parties to a contract could only recover the actual costs of the breach.
"The Reserve Bank has stated that banks took $1.2 billion in exception fees in 2008 alone. They charged between $25 and $60 for some transactions when the true cost is probably less than $2 per transaction," Maurice Blackburn chairman Bernard Murphy said.
"It is time the banks reimbursed their customers. It is simply unfair that a bank could charge, say, $40 for going $10 over the limit on a credit card when the actual cost to the bank is under a dollar."
Because the amounts charged were so inflated they were arguably illegal and customers should be entitled to a refund, the firm said.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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