Bank customers scored a major victory on Thursday after the High Court overturned a Federal Court decision and ruled that bank fees they questioned in a class action suit could be considered penalties.
The court decision paves the way for the lawsuit to argue the fees were too much for the late payment fees they paid large Aussie banks. The lawsuit was initiated by 38,000 customers of ANZ Bank which eventually expanded to a class action suit that involved 170,000 customers and eight banks which they accused of overcharging them $223 million that they sought a refund.
The lawsuit will return to the Federal Court, which ANZ Chief Executive Phil Chronican said the bank would vigorously defend. He said the High Court ruling was an "early procedural step in what is proving to be a long and complex class action" that failed to resolve anything.
"Most of these fees relate to the early stages of people's accounts being out or order in some way or another An out of order account is the early stage of bad debts. We could incur several hundred million dollars a year in bad debt costs," Brisbane Times quoted Mr Chronican.
He downplayed the reduction and scrapping of the controversial fees as an admission that ANZ has been overcharging customers.
"Many businesses change their price structures . . . I don't think you can read anything into the fact that these decisions were made three years ago," he added.
He insisted the fees were reasonable for the service that ANZ provided and fair in the overall context of how the accounts were run.
"The burden of proof is still on the plaintiffs here to establish that these things were excessive and constituted penalties. And of course that hasn't even been considered yet," Mr Chronican said.
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