i thought it was also some overcharging on some fees or something????,

I know this have been ongoing for two or so years

But who is able to say a fee is 'excessive'?

I mean, I had $30 of fees from overdue library books once. Maybe we need to launch a class action against libraries as well.

I think it's something like:

'The fine or charge should reasonably represent the cost incurred by the company'

Banks shouldn't be in the business of making profits on fines and charges (other than charges that you sign up for like account keeping fees etc).

Also, banks have the ability to stop any transactions that take your account in the red, but they let that slide, as a 'convenience' to you, and then charge you inappropriate rates for it.



last edited by mission at 14:54:01 05/Dec/11

But who is able to say a fee is 'excessive'?

without knowing anything about the specifics of the case or the relevant legislation i'd hazard a guess that whether the fee is 'excessive' or not would be decided on the amount of the fee relative to the economic harm the event that caused the application of the fee caused the bank.

e.g. if on average a late payment from a customer cost a bank $10 (foregone interest, admin costs, etc) and the late payment fee was $50 then it could possibly be ruled excessive.

however, i am not a lawyer and this post is purely speculation.

paging fade for a legal consult!

Taggs is on the money, as usual.

Liquidated damages = good, penalty = bad.

It's probably best to start at what is damages. Damages is compensation for loss which is suffered due to non-observance with the terms of a contract.

Damages is not punishment for breach.

Damages can be liquidated (fixed or defined), or unliquidated (whatever the actual loss is that flows from the breach).

Pre-defined charges are an example of liquidated damages. Strictly speaking, each time you over-draw your account you are in breach of your contract with the bank.

Liquidated damages must be a genuine pre-estimation of loss.

Where a contract stipulates that on breach the contract-breaker will pay an agreed sum which exceeds what can be regarded as a genuine pre-estimate of the damages, it is likely to be a penalty (not liquidated damages).

Penalty clauses are unenforceable - even if both parties agree to it.

Thanks fade/taggs, good explanation.

I'm still leaning right on this issue though. I think if you're unhappy with bank fees then you change banks and thereby send a message to the bank yourself.

Strictly speaking, each time you over-draw your account you are in breach of your contract with the bank.

how does this work when the bank "approves" the transaction that would overdrawn your account.. and be the only member of the transaction that has the means to check the account during the transaction (in between checking your bank account and heading to the stores the bank / 3rd parties could have processed any number of transactions against your account.)

The part I don't get is there are other banks. Why not just bank with those instead? There is enough competition in this market place, surely, that banks should be able to charge whatever fees they want.

I believe this is just the first case. If this is successful I think they said the next target was the Commonwealth, and then on and on.

So why cant we charge them $30 everytime our pay is in a day late because of a "computer malfunction" on their end?

and yet my CC still can get "declined - insufficient funds" when making a purchase through a pinpad. (ironnically, i had to overdraw my savings account to pay for fuel that day...)

regardless though, a transaction to your savings account is instant and talks to the issuing bank.

notice != waiver.

I'm with ANZ and don't get charged any fees ever.

Ditto. Haven't paid a fee for years with them.

NAB got rid of all those fees at the start of this year.

i just received this in an email from Financial Redress :

On Monday the Federal Court ruled on the preliminary issue of whether exception fees could amount to penalties at law. In a nutshell, the court found in class action member’s favour on late payment fees on credit cards, but against on overdrawn and over-limit fees.

The main case, which will consider wider areas of unfairness, and what ANZ’s true costs were, is likely to be heard in the second half of 2012. In the meantime, your lawyers will appeal those aspects of the preliminary judgement that went against class members. ANZ will likely do the same.