NZ won't see Australian-style bank action
A sweeping new Australian class action over hundreds of millions of dollars of credit-card late fees cannot be replicated in New Zealand.
Law firm Maurice Blackburn has filed lawsuits against ANZ, Citibank and Westpac, with National Australia Bank, American Express and the Commonwealth Bank expected to follow.
The new suits run in tandem with existing class actions against the major banks, but open them to anybody who has ever been charged excessive fees.
The current lawsuits can only give restitution to those customers who have actually registered.
The Australian banks' local subsidiaries, along with the state-owned Kiwibank, are all facing similar legal action in New Zealand.
However, lawyer Andrew Hooker, of the Fair Play on Fees campaign group, said the ability to run both open and closed actions in tandem was "a quirk of the Australian class action system".
"It doesn't have any direct effect on New Zealand, and the cases in New Zealand are proceeding as they have been," he said.
That means only the 41,600 people who have actually signed up to the action will be able to reap the rewards of any compensation that might be awarded.
Fair Play on Fees has delayed plans to file proceedings against BNZ, Westpac and ASB, which it had planned to do several months ago.
It has, however, commenced legal action against ANZ and Kiwibank, with court dates yet to be set.
The banks have vowed to vigorously defend themselves from the claims.
The argument hinges on whether various penalty fees charged to customers for the likes of unarranged overdrafts and dishonoured and late payments are reasonable or not.
In a test case in Australia, the Federal Court has ruled that late-payment credit-card fees charged by ANZ were "extravagant, exorbitant and unconscionable".
However, it has thrown out Maurice Blackburn's claims relating to other fees. Both sides are appealing the decision.