High Court Hears Class Action Suit against ANZ

ANZ Bank is in the hot seat as 38,000 customers have filed a class action suit, the biggest in Australia.  The case was initially filed in 2010 shall be heard by the High Court today and the result might be announced within six to eight weeks time.

This class action suit follows the May 2010 class action by the IMF against the banks, including ANZ, National Australia Bank, Citigroup, Westpac, and Commonwealth Bank.

The lawyers shall be telling the court that the penalty charges to the customers were over the actual cost covering overdrawn accounts, dishonor fees, overdrafts, and over-the-limit credit card accounts.

It is expected that the High Court shall determine whether the fees charged are service fees or penalties.  According to Andrew Watson of Maurice Blackburn, the bank is already charging customers of a fraction of their fees as their service fees and therefore, penalties are illegal under the law.

It is said that some $220 million in overcharges are owed to 170,000 customers from eight different banks.  The penalty fees are estimated to be around $5 billion and should be returned to the customers within the next six years.

Furthermore, the 38,000 customers are seeking $50 million in fees which is also part of the large action suit already filed to the seven banks.

Watson foresees that this will be a difficult battle as what is being challenged is the English law instituted since the 12th century.  He says that the banks are hiding behind complex banking terms.  According to James Middleweek of Financial Redress, one bank is already implementing zero charges.