High Court delivers bad news for credit card users
A class action representing hundreds of thousands of Australian credit card users who objected to high late payment and other ‘penalty’ fees has been rejected by the High Court of Australia. The action was against ANZ Bank, Commonwealth Bank, Westpac, National Australia Bank (NAB), Citibank, St George Bank, BankSA and Bankwest.
The class action legal case was launched in 2010, with ANZ Bank as the lead defendant. Yesterday’s judgement by the High Court in favour of ANZ means actions against the other banks are unlikely to proceed. National Australia Bank agreed in 2015 to settle the case with its customers and repay high late payment and other credit card ‘penalty’ fees.
What is a credit card ‘penalty’ fee?
At the heart of this case was the question of whether high credit card ‘penalty’ fees are illegal they are out of proportion to the cost to the bank of receiving a payment late. Banks and other credit card issuers have typically set late payment and other fees at between $20 and $35. Also in question was the right of any company to impose a penalty on customers. The law firm representing the Australian bank customers, Maurice Blackburn Lawyers, argued, essentially, that only governments have the right to punish citizens with penalties.
Chief Justice of the High Court of Australia, Robert French said Maurice Blackburn did not prove that the sums of $20 and $35 were out of all proportion to the costs borne by the banks.
Over the last few years many banks and credit unions have reduced their credit card fees in the face of a customer backlash.
Which banks will repay high credit card ‘penalty’ fees?
Maurice Blackburn Lawyers national head of class actions Andrew Watson said National Australia Bank credit card customers would still be entitled to repayment of their credit card penalty fees, despite the outcome of the High Court case. That means NAB will pay a total of about $6.6 million to its credit card customers who have been charged high late payment and other fees.
What can I do about credit card fees?
Not all banks and credit card issuers are the same. If you are unhappy with the high fees charged by your current credit card issuer, look around and compare fees and charges from other banks and credit unions.
Infochoice clearly explains all late payment and other fees that are charged on all the credit cards on offer from major banks and credit unions in Australia.
On the Infochoice credit card comparison tables you will see four tabs – Rates, Features, Other Fees and Rewards. By clicking on the ‘Other fees” tab, you can search and sort listings by the following fields:
– Late payment fees
– Over limit fees
– Duplicate statement fees
– Minimum repayments
– Overseas ATM withdrawal fees
– Overseas ATM balance fees
– Cash Advance rate
Or, when you find a credit card on the Infochoice credit card comparison table that you might like, you can get a full run down of fees and charges on its comprehensive information page. For example, clicking through to the to the Bank of Melbourne No Annual Fee Visa credit card information page will reveal that this card charges $9 in late payment fees.
Don’t accept a bad credit card deal. Take control and get a credit card that you are happy with.