Banks sued for $1 billion

The big four Australian-owned banks - BNZ, ANZ, Westpac and ASB, along with state-owned Kiwibank are being sued for a collective $1b in a massive class action lawsuit announced today.

The action is being led by New Zealand lawyer Andrew Hooker, Australian class action experts Slater & Gordon and litigation funder Litigation Lending Services (NZ). They say more than one million New Zealanders are eligible to join in the class action lawsuit.

Fair Play on Fees Lawyer Andrew Hooker says banks have been overcharging Kiwi customers on default fees for years.

The fees are charged when customers overdraw their accounts, pay credit card bills too late, or bounce a cheque, it said.

A website has been launched for people who want to be part of the lawsuit to register.

The website - "Fair Play on Fees" describes that action being taken like this:

"When your account balance runs low or you are late with a credit card payment, the last thing you need are extra fees; yet for years that's exactly what the banks have been hitting you with.

"They're called 'exception fees', and you're charged them when your account goes into unexpected overdraft, you exceed your credit card limit or make a late payment. Even if the bank doesn't allow a payment to go through, they'll still charge you a 'dishonour fee' for the so-called service. We estimate that New Zealanders have paid the banks around $1 billion in these fees over the past six years.

We think that these fees are unfair and should be challenged in court. Although the amounts ($15 to $35) sting you, because litigation is expensive it has not been worth taking the banks on by yourself. In Australia, lawyers have launched class actions valued at about $280 million to recover these fees. We think it's time for New Zealanders to band together and stand up to the banks.

There is nothing to lose, and no upfront cost. If you've been hit by one or more of these fees over the past six years, all you need to do is sign up. Unlike the banks, we're not about to charge you fees for no obvious gain. Instead, Litigation Lending Services (NZ) will fund all the legal costs, in exchange for a right for them to be reimbursed if the claim succeeds along with 25 per cent of the compensation."

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.

Shares in Australia & New Zealand Banking Group edged up 0.03 percent to $36.21 on the NZX, while Westpac Banking was unchanged at $38.80.