Finance Finance News Big banks score major win over consumers

Big banks score major win over consumers

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The country’s largest banks have escaped having to pay damages of up to $400 million to thousands of customers who were hit with penalty fees on loans and credit cards.

The full bench of the Federal Court has upheld an appeal against a decision by Justice Michelle Gordon last year that found that ANZ had acted “unconscionably” when it levied late fees on customers for missing loan repayments.

However, the full bench decision that was handed down on Wednesday morning, means that ANZ and other banks will not have to compensate customers for levying the controversial fees.

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While the decision is a major loss for Maurice Blackburn and the litigation funder, Financial Redress, it does not signal the end of the six-year legal battle.

Maurice Blackburn’s head of class actions, Andrew Watson, said the firm would launch an appeal in the High Court.

“We are still digesting the details of what is a large decision but based on what we’ve read we think there are grounds for appeal and will be making an application for special leave of the High Court,” he said.

“It is perhaps appropriate that Australia’s largest consumer class action will ultimately be determined by Australia’s highest court.”

The head of ANZ’s Australian operations Mark Whelan described the unanimous decision of the full bench as “carefully reasoned”, adding that he hoped it would put an end to the legal battle.

“Our long standing position has been these fees were lawful and we’re pleased this has been vindicated by the full Federal Court,” he said.

“We were particularly pleased the Court found there was no dishonesty on ANZ’s part and these avoidable fees were fairly and fully disclosed and there was no lack of good faith by ANZ.”

The Federal Court’s finding against consumers on the legitimacy of late payment fees is likely to complicate settlement negotiations between Maurice Blackburn and National Australia Bank.

NAB is the only major bank not being sued by Maurice Blackburn over penalty fees after it agreed to settle all claims last year.

Mr Watson refused to comment on whether NAB has agreed to stump up some compensation for customers despite the outcome of the appeal.

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