Credit card late payment fees are ‘a penalty’

07/12/2011

ANZ yesterday prevailed over its opponents in a preliminary Federal Court ruling on the legal issues at stake in a test case over alleged overcharging of penalty fees. Yesterday's ruling dealt mainly with whether the fees levied by ANZ - $35 in most cases - were the result of a breach by the customers of their contracts with the bank.

Justice Michelle Gordon analysed 17 different fees across four ANZ product categories, using examples from the accounts of three customers selected by Maurice Blackburn. Gordon ruled that 13 of the 17 fees "are not capable of being characterised as a penalty".

The fee types in this group include those labelled by the bank as honour fees, dishonour fees, overlimit fees and non-payment fees. She ruled that four late payment fees on consumer credit cards and commercial cards "are capable of being characterised as a penalty".

IMF (Australia) said in a media release that it "will consider an appeal directly to the High Court". ANZ is also considering an appeal over those aspects of the judge's ruling that adversely affect its case.

Source: Banking Day