Dishonour fees' lawyer seeks plaintiff
It's a "beauty parade" the like of which New Zealand has not seen.
People are lining up to volunteer to be the face of the bank dishonour fees legal battle, hoping they will be picked by lawyer Andrew Hooker. He is leading the "representative" action claiming that dishonour fees for making a late payment or not having enough in an account to meet an automatic payment are illegal.
The action is dubbed representative because the named plaintiff, who has complete indemnity for all costs, stands as the representative for all those who have registered - a number that passed 20,000 last week through the website fairplayonfees.co.nz.
Hooker says he has been receiving emails from people who want their name on the case.
"We've been receiving emails from people volunteering to be the representative," Hooker said. Work to pick the representative individual is set to start.
"The next thing we are going to do is pick a representative. I don't even know which bank it is going to be," he said.
In the Australian case, it was a Mr Andrews, and the ANZ bank was the one chosen to defend its dishonour fees.
Just as with Mr Andrews, the individual chosen in New Zealand would have complete indemnity for costs, so there was nothing to fear, said Hooker.
He said "data-mining" had identified patterns, including evidence that there were people who paid dishonour fees on a regular, in some cases monthly, basis.
"It's expensive being poor," Hooker said.
Answering questions on whether as few as 20,000 people could have been charged sufficient dishonour fees to pay the estimated $3.5 million costs of running the case - including paying the Australian litigation funders bankrolling it - Hooker said many of those signing up had paid sums running into the hundreds, and sometimes thousands of dollars.
"There are people in South Auckland who have paid $15 a month for the past four years," Hooker said. "That's hundreds of dollars. There are individuals who have claims of more than $1000 and $1500 each."
Should they not get sufficient sign-ups to justify the cost of the case, it may not go ahead, though that decision is up to the litigation funders.
The Federation of Family Budgeting confirmed that dishonour fees were, for some, a monthly cost. There were some from poorer parts of Auckland who had been paying dishonour fees on a regular basis for years.
A spokeswoman said some people it helps, have patterns of spending and behaviour which end up costing them dearly. These included not reading their banks statements and paying no attention to the dates of their automatic payments, when withdrawing money from their accounts.
There has been little comment from the banks on the case, which is a parallel action to one under way in Australia. However, the Bankers Association said the action failed to take into account differences between the New Zealand and Australian banking sectors. Three of the four main fees being targeted by the action had been investigated by the Commerce Commission, which had issued guidelines the banks had followed.
It also pointed out the fees were avoidable by customers and that people unhappy with their bank could switch to another.
Most banks, however, have very similar dishonour fees. One exception is the BNZ, which canned one form of dishonour fee on transaction accounts in 2009. Though it chose to retain credit card dishonour and late payment fees.
Sunday Star Times