(17 May 2010 – New Zealand) A class action similar to the A$5 billion lawsuit gaining rapid momentum in Australia will target the New Zealand subsidiaries of the big four; as claims the arise that the Kiwi’s have endured similar gouging to the tune of NZ$100 million (A$79 million) a year.Two Christchurch-based law firms are planning a lawsuit targeting potentially hundreds of millions of dollars in overcharged penalty fees.
The big four New Zealand banks include Westpac, ANZ New Zealand, Bank of New Zealand and ASB, the banks are all Australian-owned and have similar fee structures.
Wakefield Associates, one of the firms heading the Lawsuit, principal Gary Wakefield has said that the Kiwi banks have also gouged their customers in the same way as their parents.
Mr Wakefield said hundreds of thousands of people had been overcharged and were often the poorer people who have struggled with running overdrafts during difficult financial times.
The penalty fees, which banks call ‘exception fees’, typically include: Honour fees, generally for overdrawing on a bank account or exceeding an agreed overdraft limit; dishonour fees, for bounced cheques; late-payment fees on credit cards or loans; and fees for overdrawing on a credit card.
The New Zealand fees typically range between NZ$20 and NZ$40 a transaction, yet it has been estimated that the actual cost of processing such transactions is less than NZ$1.
On Thursday, as the news spread of the action, 1000 people an hour rang the hotlines of the Australian class action funder, IMF Australia, wanting to join the suit.
Chief executive Hugh McLernon said that it has been bedlam. The interest is huge because of the pent-up anger these fees generate.
It has been reported that a group of wealthy investors would bankroll the New Zealand court battle in return for a slice of any compensation awarded by the courts.
They were all relatively substantial businessmen who could invest reasonable sums and would not be swayed too much by the amounts they could potentially lose, Mr Wakefield commented.
A Massey University banking expert estimated the New Zealand banks charged NZ$100 million in penalty fees a year.