When Mark Murphy’s construction business slowed last year he relied on overdraft protection to cover a shortfall in his bank account.
At first, ANZ bank’s $37 penalty fee didn’t seem like much of a burden for Murphy’s Group Services, but when his Sydney-based company put through dozens of daily transactions to keep operating, the bill quickly ballooned.
He now owes more than $35,000 in bank fees from a single account.
“It’s outrageous,” he told AAP.
“We have to stand up to these guys. I mean, banks have to be profitable, I understand that, but they have to be realistic.”
The 49-year-old became one of 27,000 people to join a class-action lawsuit against bank fees, the first of which was filed in the Federal Court on Wednesday.
The $50 million claim, filed in Melbourne, alleges ANZ Bank has ripped off thousands of customers in the past six years.
“It’s a case in which we allege that the exception fees that are being charged are simply illegal because they are a penalty,” said Bernard Murphy, chairman of law firm Maurice Blackburn, which filed the 112-page lawsuit on behalf of ANZ account holders.
“We also allege that the bank’s contracts are unfair and unconscionable.”
Lead applicants in the ANZ lawsuit include a former Melbourne bookshop owner and a tradie who both say they lost thousands of dollars in bank fees and now want to get one back “for the little guy”.
The lawsuit targets exception fees, which include dishonour fees, over-limit fees and late payment fees on credit cards, and does not include monthly bank fees or ATM fees.
ANZ will fight action
ANZ Bank said it would vigorously defend the legal action.
“We recognised that these fees were unpopular with customers,” CEO Philip Chronican said in a statement.
“This is why we took action to simplify fees in line with our customers’ expectations, and they have been benefiting from this new fee structure since December 2009.
“It’s a big leap, however, for a fee to go from being unpopular to being unlawful.”
The case has drawn support from activist group GetUp!, consumer advocate Choice and The Australia Institute, whose representatives were outside the court on Wednesday urging more banking customers to come forward and join their cause.
Over 200,000 claimants are awaiting further legal action against other big banks, which, if filed with the courts, will become the biggest class action in Australian history.
The legal proceedings began in May when Financial Redress, a subsidiary of IMF (Australia), funded the litigation and began searching for claimants.
Financial Redress managing director James Middleweek said they had just scratched the surface of the potential $5 billion charged in exception fees.
He expects claims against other banks to move ahead shortly.
“I think the plan would be to roll out four or five of these cases in the coming months,” he told AAP.
Much will depend on the results of the ANZ case, but lawyers filing the claim say they’ve studied a similar judgment in the UK and believe they have a strong case.
National Australia Bank took the lead in reducing its fees earlier this year, but it is not immune from a class action aimed at recovering past fees.
Mr Middleweek said over 30,000 NAB customers had come forward to become claimants.
If successful, the ANZ lawsuit would recover roughly $1,500 in bank fees per person.