Three firms have today launched a call for New Zealanders to sign up to participate in class actions which will claim back excessive bank default fees.
The litigation will be the largest class action in New Zealand’s history, with banks unfairly charging around one billion dollars in fees over the past six years. More than a million New Zealanders are eligible to join.
The legal action is being led by New Zealand lawyer Andrew Hooker, Australian class action experts Slater & Gordon and litigation funder Litigation Lending Services (NZ).
Fair Play on Fees Lawyer Andrew Hooker says banks have been overcharging Kiwi customers on default fees for years.
“Customers are charged an average of $15 every time they overdraw their accounts, pay their credit card late or bounce a cheque when the cost to the bank is actually just a few cents,” he says. “These fees are excessive and add up to around one billion dollars over the past six years. It’s time Kiwis fought back.”
Hooker explains that the case will be based on a principle of contract law which places a limit on the amount a customer can be charged if they default on an obligation. If a default fee is higher than what it costs the other party then it is an unenforceable penalty.
“We understand that a bank is a business and they have to charge fees. But these fees also have to be fair and lawful. That is what this class action is about.”
Hooker says banks have been ignoring the principal of contract law for years and customers have been helpless to fight them. “Banks are in the privileged position of having access to customers’ funds and can just extract these fees from customers without much of a right of reply. They have also relied on individuals not making the effort to take the banks to court. A class action is the only way banks can be held accountable and prevented from charging excessive fees now and into the future.”
The litigation will be structured so that claimants have no upfront costs and nothing to lose. “The entire litigation process is funded by Litigation Lending Services (NZ) so all legal fees will be rendered on a no win, no fee basis.”
New Zealanders can join the action against unfair bank fees by registering at www.fairplayonfees.co.nz.