Bank Fees Class Action Lawsuit Expands, May Target More Lenders

The bank fee class action lawsuit filed by Australians has expanded with the complainants now questioning $216 million exception fees collected by the lenders.

The expanded lawsuit may target more lenders as the law firm Maurice Blackburn filed on Wednesday a new claim in the Federal Court against St George and Bank SA which are owned by Westpac. The new suit was filed by the law firm on behalf of more than 1,500 Bank SA depositors and 9,000 St George customers for $16 million exception fees.

James Middlewick, managing director of Financial Redress, said Bendigo and Adelaide Bank was a likely target for a law suit over bank fees. Financial Redress is a subsidiary of IMF Australia which funded the lawsuit.

The first lawsuit was filed in 2011 against ANZ Bank covering $50 million worth of exception fees charged on credit cards and transaction accounts. The lawsuit was expanded to include Commonwealth Bank, the National Australia Bank, Westpac and Citibank over $150 million fees.

With the addition of Bank SA and St George in the lawsuit, the class action now covers 160,500 irate bank customers and seven lenders.

At the time of the claims, the fees ranged from $20 to $60, although most of the fees have been reduced by the lenders in response to growing political pressure for more competition into the retail banking sector.

Paul Gillett, senior associate at Maurice Blackburn, said that the law firm initially planned to include 12 banks in the class action suit for collecting fees that did not reflect the true cost incurred by banks.

"They are charging from $20 for something that we are of the opinion would cost them a few cents," The Australian quoted Mr Gillett.

St George, which has yet to receive a copy of the lawsuit, said it would defend the bank's action. The lender insisted that it has fully disclosed its fees to clients.

Bank SA, which had reduced its exception fees to $9 from as high as $45 for credit card and account customers, also said that it has fully disclosed fees to customers

According to the Reserve Bank of Australia, because of the reduction of exception fees, the amount collected in the year to June 30, 2010 was down to $652 million from the previous $1.3 billion.