Bank customers are taking aim, locking, loading and firing, with the legal crosshairs now marking eight major banks in a bold move to recover hundreds of millions in bank fees.
This class action is lining up the banks like dominos. Lawyers first targeting the ANZ in 2010, then roping in the Commonwealth, Westpac and the National Australia Bank. Citibank, St George and Bank SA soon fell into the class action, now the eighth is Bankwest - the latest domino to fall.
“It now brings us to a combined total of 170,000 people seeking recovery of around $220 million in exception fees," Paul Gillett from law firm Maurice Blackburn said.More stories from Today Tonight
When this class action began two years ago 38,000 angry customers were suing ANZ. Since then the count has risen rapidly and customer numbers now make this the largest class action case every mounted in this country It’s all for a massive amount of money - a fight over excessive fees.
“We say that the fees, the exception fees that we are pursuing, do not reflect the true cost for the bank of being late on your credit card. We say it cannot be the $20 or $30 you're being slugged with if you're a few days late. Surely it's just a matter of sense," Gillett said.
Gillett is leading this class action, which is now recruiting another 6,000 Bankwest customers to the cause.
“Australian families, households, and small businesses are sick of the banks taking them for granted," he said.
Wendi Kirwan-Elliott is one of the latest to join the anti-bank fee crusade, as a Bankwest customer hit with exception fees.
“I was a bit stunned when I think about it. For $2 maybe over the limit, I'm paying $35, and they really don't need to take that amount of money off me," Kirwan-Elliott said.
But the thousands in fees paid by Kirwan-Elliott is a drop in the ocean.
Australia's largest litigation funder IMF is backing the class action. The managing director of the IMF subsidiary, Financial Redress is James Middleweek, who’s been nicknamed the ‘Bank Buster’. He claims they had no choice but to target Bankwest.
“There's potentially up to $5 billion of unfair fees out there to be claimed," Middleweek said.
“Banks used to charge $50 for these type of exception fees. Most have cut theirs to somewhere between zero and $15. Bankwest is still charging somewhere between $30 and $45 and that's completely unacceptable."
These fees are the banks’ major cash cow. In 2000 bank fees totaled $6.25 billion. Five years later banks had added another $3 billion to that and in 2009 that figure had jumped to $12.7 billion. Banks were still pulling out $11 billion plus in 2010.
“They're simply taking their loyal customers for a ride," Middleweek said.
A ride that is becoming very bumpy for Australia's banks, unhappy at being taken before the courts.
“Treat your customers fairly when it comes to fees, and if you're still charging $30 or $40 for these types of fees, you better start cutting them," Middleweek warned.
Former bank insider Adrian Bradley believes the class action and massive client anger is having an effect.
“They don't like negative publicity, they don't like something challenging their brand, no big business does, and you can accept that. But the banks tend to take this a lot more seriously than a lot of businesses I have been in," Bradley said.
Eight are now in the legal crosshairs, but the class action is set to be widened even further. Another four unnamed banks and at least two credit card companies are on the IMF hit list, and all are bound for the Federal court.
- Bank charges class action - www.financialredress.com.au
This reporter is on Twitter at @RichoTT7
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