Millions of Australians will soon know whether penalty fees levied by the major banks since the early 1990s were collected illegally.

The full bench of the High Court is expected on Wednesday morning to publish its decision on a long-running test case involving ANZ Bank and almost 50,000 customers who claim they were overcharged for late fees on mortgages, business loans and credit cards.

Litigation firm Maurice Blackburn has been running the case since issuing proceedings against ANZ in September 2010.

Maurice Blackburn has argued that ANZ’s late payment fees are unlawful because they often exceed the true cost to the bank of managing accounts when customers are late paying credit cards, mortgages and other bank services.

In a decision handed down by the Federal Court in 2014, ANZ was found to have been levying late fees of up to $35 for late payments that only cost the bank an average of 50 cents to manage.

Maurice Blackburn’s Andrew Watson is leading the suit against ANZ. Photo: AAP

At the time the court found that ANZ’s late fees policy was “extravagant, exorbitant and unconscionable”.

However, the full court of the Federal Court reversed that decision last year, ruling that banks were justified in levying penalty fees.

Hearings commenced in the High Court this year after Maurice Blackburn decided to appeal.

If the plaintiffs are successful, ANZ could face a compensation bill running into the hundreds of millions of dollars and the implications are likely to be profound for most other Australian banks.

Other banking service providers including Commonwealth Bank, Westpac, Bank SA, Bankwest and American Express also levied exorbitant late fees and each face massive compensation bills if ANZ loses the test case.

All customers are in line for compensation

More than 185,000 customers of the country’s largest banks are participating in the class action, making it the largest consumer-driven litigation case in Australian history.

If ANZ loses the High Court appeal it is likely that all customers of the bank who paid late fees in the last 20 years might be eligible for compensation, not just those who participated in the case.

Moreover, other banks known to levy late fees higher than ANZ might be directed by the High Court to negotiate settlements with Maurice Blackburn.

The outcome of the ANZ suit will have profound repercussions for other banks. Photo: Getty

Banks like Westpac and CBA might try to argue that their fee structures were distinguishable from ANZ’s and seek court hearings to put their cases.

The pending decision could also have big implications for other service providers who impose penalty fees on customers who pay bills late.

These include telcos, electricity providers and water utilities.

Universities might also be vulnerable if the decision goes against ANZ because they levy some of the largest fees on students who are late to enrol in courses.

The High Court is expected to publish its decision at 10am on Wednesday morning.