Australian consumers sue banks

[ZenGum]

A class action is being put together, suing Australian banks to recover about $5 billion in fees that may have been illegal.
Link to the ABC.

A class action is being launched in Australia against local and foreign banks for repayment of dishonour and late fees.

Official figures show the banks collected nearly $1.2 billion in such fees in the 2008 financial year.

The class action, being run by a subsidiary of litigation funder IMF, will relate to honour and dishonour fees on bank accounts, and over limit and late fees on credit cards.

The big four banks - Commonwealth Bank, ANZ, National Bank and Westpac - recently scrapped or reduced many of those charges.

SNIP

Maurice Blackburn Lawyers are the solicitors running the action against Australia's 12 biggest banks.

The case will be based on the claim that the fees are illegal because they amount to a penalty rather than a legitimate fee.

SNIP

The point seems to be that Banks were allowed to cover their losses if you were overdrawn, but sometimes the account was overdrawn by $2 and the fee was $45, so it will be argued that it is not really "cost recovery" but "illegal penalty".

The big four Australian banks were four of the eleven world banks to come through the financial crisis with their AAA credit ratings intact. They and the mining sector are the last palces in the Australian economy where there is (perceived to be) money. And we've just taxed the miners.

[Aliantha]

There's a fair bit of sabre rattling going on in the mining sector over that tax. I'll be very surprised if it ends up being applied if not reduced.

On the one hand I feel like joining the class action. On the other hand, I suppose high penalties are a deterant for people overdrawing their accounts. I know in the past I've been charged fees and when I've taken it up with the bank manager I've been able to have them removed. I suppose this is not possible in all cases, but you have to feel sorry for the battlers out there who can really suffer if they lose as little as $40.

[xoxoxoBruce]

The banks here pull shit like, if four checks, one large and three small, come in, rather than pay the three small checks and charge you $20/$40 overdraft fee on the large check, they pay the large check and charge you three overdraft fees on the small checks.

[classicman]

Very true, Another thing that happens is the banks processing. They will do a check or withdrawal immediately, while a deposit usually takes days. The problem being that if a check and a deposit come in on the same day the check will go thru potentially overdrawing the acct and causing the customer to be levied a penalty or fine.