Fair Play on Fees group targets second bank
Kiwibank is just as bad as the big Australian-owned banks when it comes to charging unlawful fees, Fair Play on Fees says.
State-owned Kiwibank is the latest bank to be sued by the Fair Play on Fees class-action group over alleged overcharging of penalty fees.
Proceedings have already begun in the High Court against ANZ and the former National Bank, which ANZ acquired in 2003.
The Fair Play on Fees campaign was launched in March by Auckland lawyer Andrew Hooker, Australian heavyweight legal firm Slater & Gordon and litigation funder Litigation Lending Services (NZ).
The group plans to sue all the major trading banks for charging penalties such as dishonour fees and late credit-card payment fees, which it says do not represent the real costs incurred.
More than 6000 Kiwibank customers had signed up to the class action so far, Hooker said.
In total more than 35,000 Kiwi clients of ANZ, Kiwibank, ASB, Westpac and BNZ had registered to join the campaign.
Hooker said he expected that number would double.
The campaign had targeted Kiwibank next because it was "just as bad" as the other major banks when it came to charging default fees, Hooker said.
Kiwibank is a subsidiary of state-owned enterprise New Zealand Post.
Kiwibank customers who signed up to the class action said they were annoyed they had changed banks to support Kiwibank and had still been hit with big penalty fees, he said.
Many Kiwibank customers had signed up to the class action relative to the bank's customer base, he said.
Lead plaintiffs for the case against Kiwibank are Auckland couple Leanne and Sydney Briggs.
The Briggses banked with Kiwibank for more than 6-1/2 years and in that time were charged almost $2000 in default fees.
Leanne Briggs said she could not take on the bank on her own.
"I knew there were going to be fees but they are just getting out of hand."
In September 2008, Briggs was charged $105 in dishonour payments and an out-of-order account fee.
The working mum said she withdrew her Kiwibank accounts last year and was now banking with ASB without issue.
Hooker said the campaign also planned to target ASB, along with BNZ and Westpac.
Another case would be announced before Christmas, he said.
"Banks aren't the direct debit police."
The law was well-established and it was not the role of banks to penalise people even if those penalty fees were written into the bank's terms and conditions, he said.
The honour, dishonour, and credit-card fees charged by banks did not fairly represent the cost of dealing with those events, Hooker said.
Small business owner Gary Watson had also signed up to the Kiwibank case.
The owner and director of North Shore inflatable boat company Terminator Boats said he began business banking with Kiwibank in 2008.
"When times were tough I did not expect Kiwibank to kick me with heavy-handed fees," Watson said.
He was still with Kiwibank but planned to change to another bank better suited to helping small businesses.
"When you're struggling anyway, trying to keep your head above water fees on top of that doesn't help at all."
Kiwibank communications manager Bruce Thompson said the bank was aware of the legal action only from media reports.
Kiwibank would not comment or take action until it had received notice from Fair Play on Fees.
Hooker said Fair Play on Fees' only communication with the banks was via the media and the court system.
Documents relating to the Kiwibank case would be lodged with the court on November 22.
Kiwibank customers have until November 21 to register to ensure their inclusion in the case, Hooker said.
Today was also an opportunity for customers of all banks to take a stand against unlawful fees, he said.
The High Court last month allowed former customers of ANZ and National Bank until December 13 to sign up to the lawsuit.
Previously, there was no guarantee those who signed up after June would be included in the action.
The next administrative hearing against ANZ/National Bank was expected to take place on November 28.
A trial date was expected to be set early next year.