Around 38,000 ANZ Bank (ASX: ANZ) customers get their day in court today, after joining a class action in the fight to return more than $220 million in bank fees.
As part of a wider bank class action, Law firm Maurice Blackburn is representing around 170,000 bank customers against eight major banks, including ANZ, BankSA, BankWest, Citibank, Commonwealth Bank (ASX: CBA), National Australia Bank (ASX: NAB), St George Bank and Westpac Banking Corporation (ASX: WBC).
Customers of the banks are arguing that they were charged a range of fees that were out of proportion for the 'offences' committed, and well beyond the actual cost incurred by the banks. The court will have to decide if the fees were fair or illegal. Andrew Watson from Maurice Blackburn says some of the disputed fees included charges of $25 to $35 for being $1 over on your account, or a day late in payment.
The law firm is claiming a total of $223 million from the banks, with ANZ the 'test' case. The banks had tried to get some fees and charges removed from the class action, but Australia's High Court ruled that dishonour fess of between $25 and $45 imposed on overdrawn accounts could also be included. The case against ANZ is estimated to be worth $50 million.
Maurice Blackburn is being backed by litigation funder Bentham IMF (ASX: IMF), previously IMF Limited.
If the court action is successful, it could have implications for other Australian companies according to some experts. Dr Wayne Courtney from the University of Sydney says that an example might be a utility company that charges an administration fee if a bill is paid late. He also thinks the outcome could result in the reform of the fees included in some consumer contracts.
Foolish takeaway
Should the court decide in favour of the bank customers, it's unlikely to make much of a dent in bank profits, with the big four all reporting billion dollar earnings in the last financial year. But what it could do is limit the amount of fees the banks can charge customers in the future.
