Court overturns ANZ credit card fee ruling

Lawyer Andrew Hooker (centre) launches the Fair Play on Fees case in March 2013

Lawyer Andrew Hooker (centre) launches the Fair Play on Fees case in March 2013

An Australian court has ruled that ANZ's credit card late fee, of up to A$35 ($35.60) is not extravagant.

But the lawyer taking the "Fair Play on Fees" case seeking millions of dollars on behalf of about 40,000 bank customers in New Zealand, says a ruling by the Federal Court in Australia does not signal the end of a similar action here.

Andrew Hooker is seeking to prove that credit card late payment fees and fees for unarranged overdrafts, which have reaped New Zealand banks millions of dollars, are illegally high.

The case follows a similar action in Australia, but across the Tasman a landmark ruling that credit card late payment fees charged by ANZ were illegal has been overturned on appeal in the full Federal Court.

The Court said on Wednesday it would reverse last year's ruling, a ruling that had threatened to cost the big Australian banks tens of millions of dollars.

Hooker said: "The ANZ's obviously had a good result in the appeal, but based on what the plaintiffs' lawyers are saying, they are going to be appealing to the High Court."

"We haven't had a chance to read the judgement in detail, so we can't really form a view on whether this effects us or not."

There were differences between the cases on the two sides of the Tasman, Hooker said, including the level of fees charged.

Hooker said once Fair Play on Fees had reviewed the Federal Court decision and the impact for the case here was known, it would comment further.

The Australian class action's principal financial backer IMF Bentham Australia said it was likely to seek leave to appeal to the High Court. Last year's decision had appeared to have implications not just for the banks, but for the validity of late fees charged by companies like telecommunications providers and utilities.

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The court ruled that the credit card late fee, of up to $35, was not extravagant or unconscionable and ANZ's appeal should be allowed. 

Maurice Blackburn's national head of class actions, Andrew Watson, said: "Obviously we are still digesting the details of what is a very large decision but based on what we've read we think there are grounds for appeal and we will be making an application for special leave of the High Court."

"It is perhaps appropriate that Australia's largest consumer class action will ultimately be determined by Australia's highest court and as a result of today's decision that's where we're headed."

"Unfortunately, the decision today runs the risk of turning the doctrine of penalties and the statutory provisions on which in we rely into empty vessels devoid of any practical or meaningful content and significantly, reducing the protection for all consumers in Australia."

In New Zealand Fair Play on Fees has filed suits against ANZ, BNZ, Kiwibank and Westpac, with ASB also in the firing line.

New Zealand Bankers' Association chief executive Kirk Hope said: "The Australian courts have so far ruled that none of the fees targeted by the action are unreasonable. For bank customers these fees are also avoidable".

"Our banks are highly competitive. Banks work hard to attract and keep their customers, and will work with them to reduce their fees. We'd encourage customers concerned about fees to talk to their bank about products and services that meet their needs," he said.


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