The number of New Zealanders who have registered for a class action to take on big banks over default fees has reached 20,000.
The Fair Play on Fees campaign was kicked off last Monday by Auckland lawyer Andrew Hooker, Australian legal heavyweight Slater & Gordon and litigation funder Litigation Lending Services (NZ).
The group intends to sue all the major trading banks for charging penalties such as dishonour fees and late credit card payment fees, which do not represent the real costs incurred.
The group hoped to recruit from a pool of as many as one million disgruntled customers, and needed 10,000 to kick off the action.
Hooker, acting for the group, said the figures were promising, but there were still thousands more people who could benefit by signing up to the action.
"The incredible response so far gives us confidence that giving Kiwis a voice against these fees is the right thing to do."
The rules of how class actions are run in New Zealand meant people had to actively sign up to make a claim, Hooker said.
"This will be New Zealand's biggest class action, we don't want people to miss out."
The $1b headline figure was a "very conservative" estimate of the scale of profiteering that had gone on over the past six years, he said.
New Zealanders had signed up much more rapidly than a similar court action in Australia, where 12 banks face lawsuits on the same issue.
The defendants have not yet been named, but Hooker said the big four banks - ASB, ANZ, BNZ and Westpac - were all in the mix, as was Kiwibank.
The heart of the group's claim is that while banks charge an average fee of $15 for overdrafts, bouncing cheques or late credit card payments, the real cost is a few cents.
Under contract law, lenders are allowed to charge fees that reflect the reasonable costs involved.
The Fair Play on Fees lawsuit will operate on a no-win, no-fee basis and will extend back the maximum six years claims can be made under the statute of limitations. The litigation funder will take a 25 per cent cut of the proceeds if the case is successful.
In the Australian litigation, 170,000 customers have joined the action seeking to extract more than A$223 million ($278 million).
Eleven of the 12 cases across the Tasman are on hold until the outcome of a test case against ANZ Bank.
New Zealanders can register to join the action online at www.fairplayonfees.co.nz.
- © Fairfax NZ News