Kelly
13-05-2010, 08:24 AM
Litigation funder IMF Australia will bankroll a class action against banks for the billions of dollars they made from what it claims are unfair exception fees.
The class action would be for the repayment of exception fees deducted from bank customer accounts during the past six years by local and foreign banks, IMF said.
The claims relate to honour fees and dishonour fees on bank accounts and over limit and late payments fees on credit card accounts, IMF said.
"Until very recently, some banks charged you up to $60 if you became overdrawn, went beyond an agreed limit, or made a late payment," IMF said on a website set up to attract possible participants in the class action.
"The true cost might only have been a few dollars at most on each transaction.
"Banks have made billions from these unfair charges," the website said, which urges those affected to join the proposed court action to get the money back.
The class action is expected to be based around legal argument that when a bank seeks redress for a customer breaking a contract it may only be able to recover a reasonable estimate of the cost, but the banks instead charge fees much higher than the actual cost.
The Reserve Bank has reported that banks charged exception fees of about $1.2 billion in 2008, 2009.
Last year NAB and Westpac axed some of their exception fees, and on Wednesday Commonwealth Bank of Australia cited reductions to retail exception fees for softer other banking income in its quarterly report.
Financial Redress, a wholly owned subsidiary of IMF, will be responsible for organising each class action.
The class action would be for the repayment of exception fees deducted from bank customer accounts during the past six years by local and foreign banks, IMF said.
The claims relate to honour fees and dishonour fees on bank accounts and over limit and late payments fees on credit card accounts, IMF said.
"Until very recently, some banks charged you up to $60 if you became overdrawn, went beyond an agreed limit, or made a late payment," IMF said on a website set up to attract possible participants in the class action.
"The true cost might only have been a few dollars at most on each transaction.
"Banks have made billions from these unfair charges," the website said, which urges those affected to join the proposed court action to get the money back.
The class action is expected to be based around legal argument that when a bank seeks redress for a customer breaking a contract it may only be able to recover a reasonable estimate of the cost, but the banks instead charge fees much higher than the actual cost.
The Reserve Bank has reported that banks charged exception fees of about $1.2 billion in 2008, 2009.
Last year NAB and Westpac axed some of their exception fees, and on Wednesday Commonwealth Bank of Australia cited reductions to retail exception fees for softer other banking income in its quarterly report.
Financial Redress, a wholly owned subsidiary of IMF, will be responsible for organising each class action.