Monday, July 6th25.6°C
26667
22748

ANZ Bank faces multimillion dollar payout after Australian court rules on credit card late fee

MELBOURNE, Australia - One of Australia's largest banks faces a multimillion dollar payout to thousands of customers after a judge ruled on Wednesday that late payment fees it charged on credit cards were exorbitant.

ANZ Banking Group Ltd. partially lost a class action law suit in the Australian Federal Court brought by more than 43,000 customers who claimed they had been charged excessive fees for years. In some cases the fees were 70 times the cost to the bank of administering late payments.

Justice Michelle Gordon ruled that the bank had been illegally imposing penalties for late payments on credit cards.

She agreed with lead plaintiff Lucio Paciocco's argument that the fees were "extravagant, exorbitant and unconscionable," and represented a breach of contract.

But she also ruled in ANZ's favour by dismissing claims that other types of bank fees were illegal penalties.

It was not clear how much the bank would have to pay back customers who had been charged too much over six years. Lawyers for the bank and customers have until next week to agree on a proposal for repaying customers that the court can rule on.

ANZ chief executive Philip Chronican said he was still reviewing the judgment, and its implications were unclear.

"We felt it was a fair fee at the time," Chronican told reporters. "We are now getting a different perspective on that as a result of what the courts have determined."

He said that in 2009 his bank reduced a number of fees it charged and abolished another 27 fees.

While the credit card fees were illegal, Chronican welcomed the court's ruling that another four fee types that had been challenged by the suit were legal. Maurice Blackburn, the law firm representing the customers, had claimed 57 million Australian dollars ($51 million) in damages from all five fee types.

Maurice Blackburn said the ruling changed the banking landscape in Australia.

The case was the first of eight planned class action law suits involving 185,300 customers of Australian banks, claiming AU$243 million ($216 million) in damages.

The court found ANZ late fees on credit cards ranged from AU$20 to AU$35. The actual cost of administering such late payments was mostly 50 AU cents and sometimes up to AU$5.50.

James Middleweek, investment manager at Bentham IMF which funded the class action, said ANZ will have to repay customers the difference plus interest.

Melbourne Law School lecturer Katy Barnett said she expected ANZ's liability would be more than AU$12 million ($11 million). She also expected other banks would also repay customers if their credit card contracts contained similar late fee clauses.

She said many companies that charge customers late fees had nervously awaited Wednesday's ruling, which would have come as a relief to many as most of ANZ's fees proved to be legal.

The Australian Banking Association, which represents the banking industry, declined to comment.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14587.89-94.50
S&P CDNX663.43-7.15
DJIA17665.94-64.17
Nasdaq4991.94-17.27
S&P 5002068.79-7.99
CDN Dollar0.7903-0.0031
Gold1167.30+4.30
Oil53.22-4.39
Lumber285.00-3.50
Natural Gas2.758-0.064

 
Okanagan Companies
Pacific Safety0.175+0.005
Knighthawk0.010.00
QHR Technologies Inc1.53+0.01
Cantex0.05+0.02
Anavex Life Sciences0.5185+0.0635
Metalex Ventures0.065-0.010
Russel Metals22.40-0.38
Copper Mountain Mining1.09-0.08
Colorado Resources0.08-0.01
ReliaBrand Inc0.006+0.000
Sunrise Resources Ltd0.035-0.005
Mission Ready Services0.165+0.005
Decisive Dividend Corporation3.00+0.00

 





FEATURED Property
2328928108-2120 Shannon Ridge Drive
2 bedrooms 2 baths
$259,800
more details
image2image2image2
Click here to feature your property
Please wait... loading


Increase property value

Photo: Thinkstock.comHere are five of the best renovations you can do to your home to increase property value. These five renovations can sometimes have a return on investment five to six times what t...


Active listening

Has this ever happened to you? You had an initial meeting with a prospect. You asked that prospect what seemed to be all the right questions. You had what felt to you like a good conversation, and bas...


The price of money

Money is not a commodity. By definition, a commodity is a generic product that is bought and sold on price alone. Money, Canadian bills for example, look the same, smell somewhat the same, and are ava...

_





26370


Member of BC Press Council


26432