A monumental class action against major banks over credit card late fees will be filed in the NSW Supreme Court today.
Compensation lawyers from firm Maurice Blackburn will lodge the action on behalf of hundreds of thousands of bank customers who have had credit card late fees imposed on them.
What could be the largest class action in Australian history, the action will initially be filed against ANZ, Westpac and Citibank while American Express and Commonwealth will be next in line.
According to report by Fairfax, every single customer who has been hit with excessive late fees from those specific institutions will be automatically included in the action.
This ‘open class’ action makes it different from other previous bank class actions, which required participants to register.
Instead, the inclusive nature of the action makes it hard to estimate the scope of the potential claim, but it is thought to be worth hundreds of millions of dollars.
Maurice Blackburn principal Andrew Watson says the scope for the payout is so large because it includes every customer from ANZ, Westpac and Citibank who has ever paid a late fee.
"We're talking about an enormous action," Watson said.
"If people are a bit like myself and not as careful about paying off their credit card, then they will be in the action and stand to benefit."
Watson also says more actions are on the horizon.
"In the near future we'll be filing further claims against other banks and they'll be on the same basis," he said.
CEO of the Consumer Action Law Centre Gerard Brody told the ABC that while banks charge varying fees for late payments in Australia, some were charging up to $20 or more.
Brody said this was completely inconsistent with the findings of the Federal Court which found that the actual cost of administering a late payment was ‘more like 35 cents’.
"These sort of late payment fees can't be all out of proportion," Brody said. "They could charge a $1 or $2 fee, and that would still probably be lawful.
"But we shouldn't have late fees worth 20, 30 or 40 dollars."
Inputs from AAP.