A victory for ANZ customers fighting against penalty fees could be worth tens of millions of dollars, their lawyers say.
ANZ is facing a hefty payout after the Federal Court ruled on Wednesday that it had been illegally imposing penalties for late payments on credit cards.
Law firm Maurice Blackburn’s head of class actions Andrew Watson said the decision was a landmark for all Australian consumers, which will change the banking landscape and have ramifications for other industries such as utilities.
The court found ANZ’s late fees of between $20 to $35 exceeded the bank’s true costs of dealing with late payments – ranging between 50 cents and $5.50.
The decision opens the door for excessive amounts charged on late payment fees by other banks to also be recovered, Mr Watson said.
Justice Michelle Gordon also placed no statute limits on the action, meaning the current case could be expanded to include many more customers.
“That fact alone will significantly expand the liability of the banks for late payment fees unlawfully charged,” Mr Watson told reporters.
“We’re considering the ramifications of the decision, but we’re talking at least tens of millions (of dollars).
“It is likely there will be announcements made shortly about future action.”
ANZ said it would be some time before the costs of Wednesday’s ruling would be known.
“The implications of today’s decision for ANZ and its customers are still far from clear and it is likely to be some time until this matter is finally resolved,” ANZ Australia chief executive Philip Chronican said.
The ANZ case is only the first of eight planned class actions involving 185,300 customers of eight lenders, claiming $243 million in damages.
Mr Watson said he hoped the other banks and lenders would respect the decision and do the right thing by their customers rather than defend litigation.
Justice Michelle Gordon agreed with lead plaintiff Lucio Paciocco’s argument that the bank illegally imposed penalties for late payments on credit cards that were “extravagant, exorbitant and unconscionable”, and represented a breach of contract.
But Justice Gordon also ruled in ANZ’s favour by dismissing claims that other types of bank fees, included honour and dishonour fees, over limit charges and non-payment fees, were illegal penalties.
Mr Chronican said the bank was pleased the court had ruled in ANZ’s favour for four of the five fee types.
Mr Watson said Maurice Blackburn was considering an appeal on those matters.