By Robb M. Stewart
MELBOURNE, Australia--Australia & New Zealand Banking Group
Ltd. (ANZ.AU) has successfully appealed a court ruling that some of
its credit card fees were unlawful, a blow to thousands of
customers who had launched one of Australia's largest consumer
class actions.
More than 185,000 Australians had signed up to join lawsuits
challenging charges including late-payment and over-limit fees on
credit cards and so-called honor and dishonor fees on bank
accounts. The law firm representing customers estimated the banks
faced up to 240 million Australian dollars (US$184 million) in
compensation payouts.
However, the Federal Court of Australia on Wednesday accepted
ANZ's appeal of a ruling early last year that late-payment fees on
credit cards it had issued were "extravagant, exorbitant and
unconscionable."
The court also agreed with the earlier ruling that the other
fees customers had sought to have refunded weren't unfair
penalties.
Maurice Blackburn Lawyers, which is leading the action, said it
planned to appeal each of the rulings in the High Court.
The case against ANZ was a test for broader action against
several other banks, including Commonwealth Bank of Australia Ltd.
(CBA.AU), Westpac Banking Corp. (WBC.AU), National Australia Bank
Ltd. (NAB.AU) and Citigroup Inc.'s (C) Citibank. A wider class
action on behalf of all customers charged a late payment fee by
ANZ, Westpac and Citibank was filed in the Supreme Court last
August. Those actions remain on hold until the ANZ case is
finalized.
"It is perhaps appropriate that Australia's largest consumer
class action will ultimately be determined by Australia's highest
court and as a result of today's decision that's where we're
headed," Andrew Watson, national head of class actions at Maurice
Blackburn, told reporters in Melbourne.
"Our concern is that the way the full court approached matters
renders the doctrine of penalties and the statutory conditions on
which we rely as empty vessels," he said.
Mark Whelan, chief executive of ANZ's Australian operations,
said the lender hoped Wednesday's judgment by the full Federal
Court would put an end to the lengthy and expensive litigation.
"We were particularly pleased the court found there was no
dishonesty on ANZ's part and these avoidable fees were fairly and
fully disclosed," Mr. Whelan said.
The class action against ANZ, dating from September 2010, was
the first to be filed and covered fees charged over a six-year
period to 2010. More than 40,000 ANZ customers had signed up online
to the lawsuit against individual fees that ranged from A$25 to
A$45. ANZ introduced a new fee structure in December 2009.
National Australia Bank in November said it planned to settle
its class action. A spokesman for the bank said a response to
Wednesday's judgment was being prepared.
IMF Bentham Ltd., which is bankrolling the class actions, said
it likely would write off about A$4 million in intangible assets
and take a A$1.5 million provision for costs pending the
appeal.
Write to Robb M. Stewart at robb.stewart@wsj.com
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