Bank Fee Case

Reporter: Jonathan Creek

The battlers versus the banks -- it's the courtroom showdown set to change Australia's banking landscape.

Each year Banks charge $1.2 billion dollars in late and overdraft fees -- now more than 150, 000 everyday Aussies, fed up with the unrealistic costs, are contesting the legitimacy of those fees in court.

They are launching a class action the likes of which the Australia legal system has never dealt with before. "If we are successful in these claims, it will change banking practice in Australia, I hope forever. It will also impact on some other companies that charge penalty fees", said lawyer, Ben Slade.

Madonna Melrose has been fighting the effects of unfair fees for two years, since a rental car company overdrew her credit card following an accident that wasn't her fault. The ANZ approved the transaction without her permission. "I was so shocked and disgusted at the way I was being treated that I rang the ombudsman, disturbed that they were able to do such a thing", Madonna said.

Father of two, Ashley McKinnon became a single dad when his wife Leah died from liver failure. Expensive treatment in the US left him with a massive debt and fees have continued to cripple his financial position. He now faces losing the family home. "I've tried you know various things in the past but its just a matter of I'll probably have a month or so to go and we'll just have to walk away", Ashley said.

Law firm Maurice Blackburn is leading the class action. They have history with these types of cases, including a $97 million settlement for shareholders of Insurer GIO six years ago.

Ben claims it's time banks were also held accountable. "The only people in this country who can fine others are statuatory authorities, the government. The banks have been fining their clients for a number of years now and made hundreds of millions of dollars profit out of it - it's got to stop", he said.

Today the first of the court actions -- a fifty million dollar claim against the ANZ was filed at the Federal Court. There are eleven cases against other banks to follow, involving claims totalling around $250 million dollars, plus interest.

Sure that's big money, but when the banks are dragging in $1.2 billion in penalty fees each year, it's hardly going to bring them to their knees. "Bank fees should be part of the ordinary profit making process of the bank, not a side rip-off, not a gig that the banks can laugh all the way to the bank and have hundreds of millions of dollars of profit being made", Ben said.

"These fees aren't for the banks providing you with any kind of service, like an ATM, they're fines. Fines for breaching a contract with the banks", said Simon Sheikh, National Director of Get Up, an activists group that has joined the fight against "unfair" banking practices, including over priced fees.

"That cost is usually in the cents, maybe a dollar. Surely it's not the twenty dollars that ANZ are now charging for late payments on credit cards", he added.

The opportunity to join the class action and keep the bank's honest is still open. If you believe you've been charged an unfair bank fee phone: 1300 473 373