Turning out to be the largest in the legal history of Australia,
legal firm - Maurice Blackburn Lawyers - has filed an open class
action today against Australia & New Zealand Banking Group
Limited ('ANZ') and several other banks for unfairly charging late
fees to customers on credit cards. Westpac Banking Corp. and its
units - St. George Bank Ltd. and BankSA - and
) stand as the other alleged firms in this suit filed in the New
South Wales Supreme Court.
Though the open class suit seeks reimbursement for the customers,
there is no specific time frame of it getting recovered. The legal
firm is also mulling over the possibility of broadening the class
action to cover nine financial institutions in total, including
Commonwealth Bank of Australia and its unit Bankwest, National
Australia Bank Ltd, and
American Express Co.
The Story So Far
In Sep 2010, Maurice Blackburn filed a case in the Federal Court of
Australia against the ANZ Group. This filing was the first among
several bank fee class actions for reimbursement of fees the banks
charged their customers since 2004. Such fees consisted of honour
and dishonour fees on bank accounts and fees related to over limit
and late payment on credit cards.
The firm took subsequent action in the later years against
Citibank, Commonwealth Bank and its unit Bankwest, National
Australia Bank Ltd and Westpac Banking Corp. and its units - St.
George Bank Ltd. and BankSA.
The cases led to the online signing up of more than 180,000
customers who were charged undue fees by these banks. These
customers claimed money with interest, which is now estimated to be
over A$240 million.
In 2012, Australia's prime court - the High Court - ruled in favor
of ANZ, stating that all the bank fees in concern could be regarded
as penalties levied by the bank. However, in Feb 2014, Justice
Michelle Gordon of the Federal Court mentioned in her judgment that
late payment fees were illegal charges and hence customers stand
eligible for recouping the money.
Notably, it was revealed from her judgment that ANZ's credit
card late fees penalty was of up to $35, which represents an
excessive amount compared to the actual cost to the bank of just 50
cents. However, she dismissed other claims relating to bank fees,
stating such fees were not unlawful.
The New Class Action
This partial win in Feb 2014 led to the new open class action suit.
While the February suit pertained only to the registered customers,
the new suit includes all customers who have been charged late fees
by the targeted banks, even those who have not signed up. An appeal
from the Feb 2014 court ruling is scheduled on Aug 18, 2014 and Aug
The open class action will be funded by Australia's major
litigation financer Bentham IMF Limited, which also funded the
related previous class actions.
While the total claim amount of this huge legal suit is yet to be
finalized, thousands of customers of the targeted banks will
benefit if the ruling goes in favor of the legal firm.
Both Citigroup and American Express carry a Zacks Rank #3 (Hold).
Some better-ranked stocks in the finance sector include Piper
Jaffray Companies (
) and Cohen & Steers Inc. (
). Both the stocks sport a Zacks Rank #1 (Strong Buy).
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