Saturday, November 15, 2014

NAB moves to settle class action over $40m in disputed bank fees

NATIONAL Australia Bank has signalled its intention to settle a class action with thousands of customers for late charges on credit cards, breaking ranks with competitors who are still in court defending charging controversial fees. 
While the payout to NAB customers have been estimated as high as $40 million, any amount to be distributed by the bank is a long way from being decided and will be dependent on the number of customers who join the case as well as the outcome of an appeal in the Federal Court by ANZ.

NAB announced it had lodged an application with the Federal Court that could end the class action being brought against the bank by up to 30,000 customers.

As part of the class action, plaintiff law firm Maurice Blackburn alleges the banks have unfairly charged their customers excessive late fees for overdue credit-card payments, following a successful case in the Federal Court this year against ANZ.

In February, the Federal Court ruled that ANZ’s late credit card fees were “penalties” and not “fees” and constituted a breach of contract.

However, Justice Michelle Gordon ruled that other fees, including over-limit and non-payment fees were valid, with ANZ and Maurice Blackburn now both awaiting the outcome of an appeal of the case in the Federal Court of Appeal.

The legal action also includes another case against ANZ, Commonwealth Bank, Westpac, Citi and BankSA for alleged unfair bank fees. The number of customers affected by the suit against the group of banks could be more than 100,000 with payouts estimated at $243m at the time it was filed.

Following reports that managing director Andrew Thorburn had written a letter advising the NAB’s Council on Corporate Responsibility to resolve the dispute, Mr Thorburn said yesterday that “this is a first but significant step towards reaching a potential settlement”.

“NAB is doing this because we believe this is the right thing to do for our customers and our business.”
The application to resolve the case through settlement has been brought with the approval of plaintiff law firm Maurice Blackburn.

“We have been working for some time with NAB to resolve the bank fees issue for its customers, but these negotiations are ongoing and we won’t be elaborating on the settlement process at this stage,” Maurice Blackburn said in a statement.

“We would encourage all banks involved to follow NAB’s example to negotiate in good faith, to resolve a fair outcome for all banking customers that have unfairly been charged these fees.”

A spokesman for ANZ did not comment on whether NAB’s action would affect their approach to any settlement, with a spokesman for CBA also refusing to comment.

The case is being brought as an open class “opt in” action, meaning up to 30,000 customers could apply to join the case. It will return to the Federal Court on November 18, leaving time for more potential litigants to join the case.

Despite reports NAB is hoping to settle for up to $40m, The Australian understands that current figures are highly speculative, and any settlement may still be dependent upon the final outcome in the Federal Court of Appeal decision on the ANZ case. 13 Nov 2014

Another (bank) business involved in fraud where only a class action will suffice.

See High Court Australia case Andrews v ANZ Bank [2012] at:

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