Australian Class Action Against Banks May Set a Wider Precedent
In a case that may set a world wide precedent, Australian litigation funder IMF (Australia) Pty Ltd is bankrolling a series of class actions against 12 Australian banks. The first, on behalf of over 20,000 customers of the ANZ Bank was filed in the Federal Court of Australia yesterday.
The action alleges bank “exemption fees” charged by the ANZ for late payments on credit cards and over-drawn accounts are punitive and constitute penalties at law because the fees charged, ranging from $45 to $60, do not represent the Banks’ actual loss on the transaction, estimated to be about $2. The claim also alleges the charges are unconscionable and in contravention of the Australian Consumer Credit Code.
Any decision in favour of the banks’ customers may set a precedent with wider implications for service providers in other areas such as utility companies that charge late fees on overdue payments. A similar action brought by the UK Fair Trading Office on behalf of consumers failed on jurisdictional grounds. The Australian case appears to be on a sounder footing.
Copyright Toni Bartush 23 September 2010