Class action cases over bank fees to be a “game changer”

Class action lawsuits against eight banks over ‘unfair fees’ has finder.com.au saying this will be a ‘game changer’ for the industry.

Citing fees between $20 and $45 for overdraft and over the limit charges, spokesperson for finder.com.au, Michelle Hutchison, said that the class action lawsuits show the power of public pressure, with a potential shake-up of bank fees across the entire industry if the cases do win.

“In fact, last year, we collectively paid our banks over $11 billion in bank fees – over $4 billion of which was from households,” said Hutchison.

However, she said that it’s worth considering voting with your own wallet and switching yourself.

Observer Christopher Joye recently wrote about how to avoid bank fee traps, and went into the reasons some of these fees crop up.

“But we can’t rely on financial institutions to charge fair fees or drop their fees altogether. The only way we will make real changes to the banking industry is if more Australians compared their financial products and switched. This will force institutions to be more competitive.”

Statistics from their site note that there are 105 home loans with no annual service fees, and 101 home loans where redraw fees are not charged.

“It’s up to more Australians to take on the responsibility with their financial products by reviewing their options and comparing deals,” she said.

“It will not only force competition between banks but also will save consumers potentially thousands of dollars every year.”

The proceedings in the Federal Court of Australia were initially issued against the ANZ bank in September 2010, over repayment of fees they have charged their customers over the past six years. These were issued by Maurice Blackburn Lawyers. The fees including honour and dishonour fees on bank accounts, over limit fees and late payment fees on credit cards.

Proceedings were then issued against Citibank, Commonwealth Bank, NAB and Westpac (16 December 2011), St George and BankSA (1 February 2012) and BankWest (18 April 2012) with more than 170,000 Australians who were charged these fees signing up online to be part of the case, with the claim size estimated at more than $220 million.

The case went to trial this month and is scheduled to run for three weeks, Maurice Blackburn Lawyers notes.

Maurie Blackburn will claim that the bank charged exorbitant fees (those being the $20 to $45) for services that cost minimal amounts (a few cents or dollars) to provide. Fees are able to be considered a penalty charged by the bank rather than a fee for service.

In other words, we will claim that the bank charged exorbitant fees of between $20-$45 for a service that cost them only a matter or cents or a few dollars at the most to administer.


jduke@propertyobserver.com.au

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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