February 5, 2014 / 12:20 AM / in 4 years

UPDATE 1-Australian court finds some ANZ bank fees illegal

* Late fees “extravagant”, other fees allowable - court

* Some 38,000 ANZ customers were seeking A$57 mln in compensation

* Late fees estimated at 25 pct of claims sought - Betham IMF

* Ruling opens door to further bank class actions (Adds judgment detail, estimate on late fee value, background)

By Byron Kaye

SYDNEY, Feb 5 (Reuters) - Australia and New Zealand Banking Group was “extravagant, exorbitant and unconscionable” to charge its customers fees for late payments, the Federal Court ruled on Wednesday, opening the door to further lawsuits on such charges.

In one of the country’s largest class-action suits, law firm Maurice Blackburn had sought up to A$57 million ($50.70 million) from ANZ on behalf of around 38,000 customers for what it said were excessive and unfair fees in the six years to 2010.

While the late fees were ruled illegal, Australia’s third-largest bank was however allowed to charge additional honour, dishonour, non-payment and overlimit fees, the court said.

The ruling opens the door for seven other class-action suits against Australian banks planned by Maurice Blackburn on behalf of customers of other major banks. The firm has signaled it wants another A$186 million for forthcoming bank fee law suits.

Betham IMF Ltd, the company funding the ANZ litigation, said it believed the late payment fees accounted for about a quarter of the value of the total claims brought in the class action against ANZ.

The fees hinged on a “primary stipulation to make a payment by a particular date” and that stipulation was “extravagant, exorbitant and unconscionable”, Justice Michelle Gordon SC said.

Justice Gordon did not award final damages and instead gave the parties until February 12 to negotiate a settlement, suggesting further hearings would be needed if negotiations failed.

The action has also been seen as a precursor to fresh scrutiny on a range of commercial contracts in Australia including building contracts, energy supply contracts and mobile phone contracts.

ANZ was not immediately available to comment. ($1 = 1.1242 Australian dollars) (Editing by Stephen Coates)

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