Bank fees are the worst, right?

Non-payment fees, over-limit fees, dishonour fees (when you use your credit card to buy stuff from infomercials at 2am) - there are hundreds of them. Okay probably not hundreds but it feels that way. And as you’ve probably heard, ANZ was the respondent in a class action which challenged the legality of ANZ charging these kinds of fees to its customers.

At first instance, the class action was successful in only one claim against the bank - late payment fees were found to be an unenforceable penalty provision, rather than a “genuine pre-estimate of the loss” likely to be suffered by the bank (and this is a big nono, as we’ve discussed before). On appeal however, the Full Federal Court has (a) confirmed the ruling that all the fees challenged in these proceedings were not unconscionable under the various statues and (b) overturned the earlier finding that the late payment fees were a form of penalty.

TBH, the main points of the judgment regarding the doctrine of penalties made our eyes bleed a little. We were more interested in the Court’s opinion on statutory unconscionable conduct, largely because the Court really wanted to make it clear that:

  • The primary judge, Gordon J, was 100% correct on principles of unconscionability.
  • Unconscionable conduct requires ‘moral obloquy’ - in other words, some kind of behaviour or conduct that goes against ideals of fair and just society. In this instance, the Court was not presented with any evidence that ANZ was preying on the poor, or that its customers were vulnerable and required protection, or that its customers were forced into opening accounts, or that ANZ did not clearly disclose relevant fees in its document - generally that ANZ did not trick or act in a secretive or dishonest manner with its customers. Accordingly, ANZ did not act unconscionably.

The Court also stressed that the intention of unconscionable conduct laws was not for the court to become a ‘price regulator’ in otherwise honest business dealings. Because that’s not their job. Don’t make them do it.

We think the Court was right. The class action people have confirmed they are appealing to the High Court, so it will be interesting to see what arguments they think will overcome longstanding principles of what constitutes unconscionable conduct.

In our view, best bet is to keep on top of your accounts or shop around for no-fee accounts and cards. And stop buying stuff from infomercials.