A victory for ANZ customers fighting tens of millions of dollars in illegal penalty fees has been dubbed a landmark day for Australian consumers.
ANZ, one of Australia's largest companies, is facing a hefty payout after the Federal Court ruled on Wednesday that it had illegally imposed penalties for late payments on credit cards.
Those charges - made when a customer missed a minimum credit bill - were either $20 or $35, representing a mark-up of up to 7,000 per cent on actual costs of as low as 50 cents.
Justice Michelle Gordon agreed with lead plaintiff Lucio Paciocco's argument that those penalties were "extravagant, exorbitant and unconscionable", as well as being an illegal breach of contract.
However it was only a partial win, with Justice Gordon ruling in the bank's favour and dismissing claims that other fees were illegal, including the unpopular dishonour charges when a customer's savings account is over-drawn.
Law firm Maurice Blackburn's head of class actions Andrew Watson predicted the decision would open the door for other ANZ customers to join a class action and those of the rest of Australia's banks.
The ANZ claim - involving 43,500 members seeking $57 million - is the first of eight planned class actions involving 185,300 customers of eight lenders, claiming $243 million in damages.
There is no time limit either, allowing class action lawyers Maurice Blackburn to expand the case to pursue funds for more ANZ customers and potentially from other banks.
"Most customers of ANZ and presumably all the other banks will be rightly concerned that for years and years and years their banks have been charging them these exorbitant fees to which they were not entitled," Mr Watson told reporters.
"There will be a significant amount of interest from consumers in getting that money which was unlawfully taken from them back."
He said Wednesday's events were very significant for both Australian consumers and any industry involved in "late payment regimes".
Consumer advocates group CHOICE, which has run campaigns against bank fees, released a statement saying the decision sent a message to businesses that late fees had to reflect actual costs.
ANZ Australia chief executive Philip Chronican hinted at an appeal, saying it would be some time before the costs would be known or until the matter was finally resolved.
The bank was also pleased the court had ruled in ANZ's favour for four of the five fee types, which Maurice Blackburn may appeal.
The late fee could easily have been avoided by customers, Mr Chronican said.
"At the time the bank felt that was a fair fee for the activity involved with a customer triggering off a process of collections when they were late paying their credit card."