The NZ Herald states
New Zealand banks face what’s expected to be the biggest class suit the country’s seen over $1 billion in default fees claimed by lenders over the past six years.
Three of Australasia’s biggest law firms will announce the class suit to reclaim the fees, according to a statement.
The fees are charged when customers overdraw their accounts, pay credit card bills too late, or bounce a cheque, it said.
A press conference is being held in Auckland at 1pm to make the announcement.
It is going to be a popular class action and I’ll await further news on it with anticipation. This particular legal battle has been ongoing over the Tasman as stuff reports.
In 2010, Maurice Blackburn lawyers announced it intended to sue 12 Australian banks for charging unfair dishonour fees and late credit card payment fees.
Since then, 170,000 Australian customers have jumped on board the action and are seeking to claw back more than A$223 million (NZ$278m).
The argument is that fees charged when customers exceeded limits were a form of punishment for the purposes of profiteering, unrelated to any actual cost recovery.
ANZ Bank lost a battle in the Australian High Court in September, and will now have to convince the Federal Court that its fees were a genuine reflection of costs.
Locally they point out..
Under the provisions of the Credit Contracts and Consumer Finance Act, the default fees that banks charge must not be “unreasonable”.
Many local lenders drastically slashed their exception and dishonour fees in mid-2009.
However the main issue with such fees is that they disproportionally fall on the least able to either afford them or to challenge them. I remember reading an article a few years back…. google found it.
The great bank fees scandal from 2008
Budgeting advisers say the poor are bearing the brunt, with some paying up to $30 a week in charges – more than $1500 a year – when they can barely afford food and rent.
The Salvation Army’s Auckland director Gerry Walker said some people seeking budgeting advice were paying up to $30 a week in fees for late payments, dishonoured cheques and overdrafts, and the people who could least afford it were “most definitely” suffering most.
“This is being identified as a growing problem. People don’t always read their bank statements and what’s being charged and whether they can afford those charges.”
“It doesn’t sound much to some people on high incomes but it can equate to 5 per cent to 10 per cent of people’s incomes.”
Walker said the kind of people getting into trouble were the least likely to challenge banks or seek better deals.
Update: NZ Herald reports on the press conference content