Lawyers claim today's High Court ruling means banks can hike late payment fees with no comeback
Australia’s banks now have a license to increase their fees after the High Court dismissed a class action against the ANZ Bank, according to lawyers Maurice Blackburn.
The court today effectively ruled that banks can charge as much as $35 for a late payment on a credit card when the cost to the bank was about $3.
Since the action started, ANZ has reduced its late payment fee to about $20.
“Today’s High Court result means banking customers have no effective means to challenge bank fees which bear no relationship to their real costs,” says Andrew Watson, the head of class actions at Maurice Blackburn.
“The ball is now firmly in the government’s court if consumers are to be provided with real protection from banks using fees to gouge customers.”
The case has been run by Maurice Blackburn since 2010, backed by litigation funder IMF Bentham, arguing that late payment fees of up to $35 were illegal penalties and contrary to consumer protection legislation.
“This was a very worthy case, which we pursued hard for many years in seeking justice for consumers right around the country who have been forced to pay fees which in our view were unfair and excessive,” says Watson.
“Many of the late payment fees charged have been reduced, but we are concerned in light of today’s decision that the banks now have a license to hike those fees back up.”
However, the ANZ says the High Court ruling means the late payment fees were neither unjust nor unfair.
“We are pleased with today’s decision by the High Court confirming that our late payment fees on credit cards are legitimate and fair,” says group executive Australia Fred Ohlsson.
“This effectively puts this lengthy legal case behind us. It allows ANZ to continue its focus on providing the products our customers value supported by great service.”
Other class actions pending against the other banks — which could have cost the banks a combined $220 million — are now expected to be dropped.
Source: The Business Insider