ANZ firm as punters gear up for fees fight
A David and Goliath battle is shaping up between ANZ Bank and thousands of its customers, who are taking the bank to court over millions of dollars in "unfair" fees.
Lawyers for campaign group Fair Play On Fees will file papers against the country's biggest bank in the High Court in Auckland next Tuesday.
While ANZ's sheer size made it the obvious first target, fellow Aussie-owned banks ASB, BNZ and Westpac are next in line, as is the state-owned Kiwibank.
Disgruntled customers of ANZ and its former sister bank National are now being urged to climb aboard the biggest representative lawsuit in New Zealand history.
The lender is accused of reaping up to $250 million in "excessive" fees over the past six years.
"Their customers have come to us in droves, with over 11,000 signing up in the past three months," Fair Play On Fees founder and lawyer Andrew Hooker said.
"We expect thousands more to join them over the next week."
The fees in question are for unarranged overdrafts, dishonoured payments and late credit card payments.
They can sometimes work out to the equivalent of over 1000 per cent interest on the sums involved - enough to make a loan shark blush.
The ANZ has vowed to fight what will likely be a long and expensive legal battle to the bitter end.
"We do believe that we have a very strong case, and we will vigorously defend this," said managing director, retail, Kerri Thompson.
"We absolutely believe that we've got good quality data that backs up the justification for these fees."
Customers agree to terms and conditions - including fees - when they enter into a contract with a bank.
Fair Play on Fees' argument is that some fees are a form of punishment, rather than a reflection of the bank's actual costs, and therefore illegal.
Thompson said the assertion that the real cost was more like a few cents than $20 was "ludicrous".
The Commerce Commission's review of some of the fees found they were comfortable with the current levels, she said.
"That's another reason why we feel confident."
Thompson also stressed that the fees were avoidable, and the vast majority of customers did not pay them.
The local campaign runs parallel to a similar class action in Australia, where 11 of 12 lawsuits are on hold awaiting the outcome of a test case, also against ANZ.
The lender lost a battle in the Australian High Court last year, and will now have to convince the Federal Court in December that its fees were a genuine reflection of costs.
All banks charge hefty dishonour fees, some of which are identically priced.
New Zealand Bankers' Association chief executive Kirk Hope said the sector was very competitive and customers had "a huge choice".
FACE OF THE CAMPAIGN
Auckland woman Sandra Cooper is going up against a multibillion-dollar bank because she wants a fair deal.
Ms Cooper, who had her cleaning business and personal accounts with the National Bank, has been chosen as the lead plaintiff for the legal action.
Over the past six years she had paid around $1500 in default fees, and said she had only recently realised the full extent of the damage.
"There are lots of people living on the breadline in New Zealand that are being ripped off by the banks."
Ms Cooper said she was usually hit with fees without realising her account was in negative territory, and claimed applications for an arranged overdraft had been rejected.
A bank statement for October 2009 shows she racked up an unarranged overdraft fee of $20 despite dipping into the red for just a single day. If that fee was expressed as an annual interest rate charged on the $56 debt, it would be over 13,000 per cent.
While Ms Cooper is the official face of the campaign, all the costs and risks are being shouldered by the lawsuit's funder.
The company, called Litigation Lending Services, is also in line for a 25 per cent cut of any proceeds that might arise.
- © Fairfax NZ News