Millions of dollars in late fees ruled unlawful
Finally ANZ customers charged with excessive late payment fees on credit cards will be eligible to get their money back, after a 4 year court battle.
The millions of dollars of late penalty fees the banks have been gouging over the years are unlawful and exceeded the true cost by up to 7,000 per cent. The finding, handed down in the Federal Court yesterday against ANZ Bank, allows customers to claim compensation as far back as they like.
It will open up the floodgates to the other six banks sitting in the queue and, according to Hugh McLernon at litigation funder IMF – which is bankrolling the action – it could open bigger floodgates than the banks.
”There are utilities that charge penalty rates for late payments that are sometimes out of all proportions. These organisations will now need to look at what they are doing as their customers are entitled to compensation,” he said.
Over 6 years, ANZ and the other banks combined raised an estimated $6 billion from various penalty fees.
The Federal Court found ANZ’s late fees of $20 and $35 exceeded the banks ”true costs” of dealing with late payments – ranging between 50¢ and $5.50 – by up to 7,000 per cent.
ANZ is facing a claim size of $57 million, according to Maurice Blackburn.