UPDATED: ANZ to ‘vigorously defend’ fees lawsuit

UPDATED: ANZ Bank to ‘vigorously defend’ fees lawsuit

By Paul McBeth

June 18 (BusinessDesk) - ANZ Bank New Zealand, the country’s biggest lender, will defend a class suit over an estimated $250 million fees charged customers for going into overdraft, late credit card payments and bouncing cheques.

The bank was today named as the first defendant in what will be several class actions against the nation’s lenders, led by Auckland-based lawyer Andrew Hooker, Australian consumer law firm Slater & Gordon and Litigation Lending Services, a litigation funding firm.

Documents are expected to be filed in the High Court in Auckland next Tuesday claiming ANZ overcharged customers millions of dollars for six years. About 11,000 ANZ customers will be represented in the action, and Hooker said other customers have until Monday night to join.

“We will be vigorously defending the claim,” ANZ retail managing director Kerri Thompson said in a statement.

“We feel the action, driven by litigation funders overseas, is unnecessary, unfortunate, and risks subjecting our customers to a long, arduous and expensive legal process with no guaranteed outcome, and certainly a success fee structured so the lawyers stand to take home significantly more than each customer they are meant to be representing,” she said.

Auckland-based small business owner Sandra Cooper has been named as the lead plaintiff, claiming she was charged about $1,500 in default fees.

About 25,000 people have signed up to the class action since it was launched three months ago, exceeding the minimum threshold of 10,000 the litigation needed to secure its funding.

Ben Hardwick, a class action lawyer at Slater & Gordon, said “the action covers customers of both National Bank prior to the merger and also ANZ customers today.” The first court hearing will probably be within two months of the documents being filed.

The action’s argument is that the fees charged are disproportionate to the cost of the default to the banks, Hardwick said.

Hooker said the more people who sign up means more money can be recovered.

“I would expect a lot of kiwis are waiting to see what happens,” he said.

The New Zealand action comes after a similar suit across the Tasman, where Australia & New Zealand Banking Group is being treated as test case. The Federal Court of Australia will hear the case in December this year.

Hooker said the rest of the major trading banks are likely to face action “over the next few months.”

The funding firm stands to gain a 25 percent commission if successful on a no-win no-fee basis, while Hooker expects his legal costs and disbursements to be $3.5 million.

The proceeding comes as Justice Minister Judith Collins works on legislation to enable faster, better and cheaper class suit actions. That policy work was expected to be done last year.

(BusinessDesk)

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