More than 11,000 people have registered to join a billion dollar legal case against New Zealand's major banks, a lawyer says.
The Fair Play on Fees campaign, launched yesterday, is seeking plaintiffs to join a class suit against New Zealand's registered banks to reclaim fees charged when customers overdraw their accounts, pay credit card bills too late, or bounce a cheque.
Organised by Auckland-based lawyer Andrew Hooker, Australian consumer law firm Slater & Gordon and Litigation Lending Services, Fair Play on Fees estimates that up to one million New Zealanders could be potentially eligible for some sort of refund.
"Within the first seven hours of the Fair Play website launching, more than 7000 people had registered at a rate of 1000 per hour.
"New Zealanders are signing up more rapidly than the rate Australians signed up to a similar class action campaign launched in Australia (per capita basis). In the first 24 hours of that campaign 22,000 Australians had registered," said Hooker.
Hooker added that he did not anticipate such a phenomenal response from the public.
"We now expect the website to register more than 20,000 in the first 48 hours of the campaign. We didn't expect these numbers on the back of the Australian experience. We are very confident that on the back of these numbers we will be able to file court documents within weeks."
To launch the class action, the campaign was required to have at least 10,000 register.
Kim Barron, a Kiwi who has been overcharged several times in default fees, said that the class action could not come soon enough.
"I've been hit several times with these fees. A little warning from them would be nice. It is a bit stiff when they take money off you when it's an honest mistake."
The campaign's Facebook site has also been inundated with comments endorsing the campaign.
"We have asked Kiwi's if they want to take the banks on. They have come back with an overwhelming yes," said Hooker.
'Banks can't charge what they like'
Fair Play on Fees says that the case will be based on principle of contract law, which says customers can only be charged a default fee that reflects a reasonable cost to the lender.
"The banks can't charge what they like, they charge us interest when we use their money, and if they want to penalise us for accidentally overdrawing our account, then that penalty must be an accurate reflection of what the cost to them is of that event," Hooker told TV ONE's Breakfast today.
"The Commerce Commission has done a great job in bringing these fees down, we simply say that they haven't gone far enough, they've come down from in the $20s to $15 now, well $15 is still far too much and the banks need to pay the money back."
"We're doing this because there is no other way that the average Kiwi can get their money back, who is going to question their bank? The sort of people who are being pinged with these fees don't have the power, don't have the ability to take their banks on and that's what Fair Play on Fees is all about."
However, Hooker said that if the campaign gets the go ahead, litigation will "take a couple of years, maybe more. It's up to the banks."
The New Zealand action comes after a similar lawsuit across the Tasman, where Australia & New Zealand Banking Group (ANZ) is being treated as a test case.
Melbourne-based Maurice Blackburn first issued proceedings in the Federal Court of Australia against ANZ in September 2010, in the first of a series of bank fee class actions for repayment of fees they have charged their customers over the last six years.
Lawyers say that 170,000 customers have joined the class action against 12 banks, including Bankwest, Commonwealth Bank and NAB, launching claims worth over A$220 million.
However, 11 of the 12 cases against the banks are pending the outcome of the ANZ Bank case.
ANZ lost a battle in Australia's High Court last year, and now is now taking its case to the Federal Court.
The New Zealand action is targeting ANZ National, Westpac, ASB, Bank of New Zealand and Kiwibank.
'Don't get your hopes up'
Meanwhile, a banking commentator has warned customers that they should not count on receiving major rebates just yet.
In response to the class action lawsuit, Gareth Vaughan told Breakfast that the figures Fair Play on Fees are using are based on estimates.
"I suppose it would pay not to get your hopes up to high, because the billion dollar figure they are using is based on overseas estimates.
"It might be conservative, it might be optimistic, and that's their best case scenario and in all reality I very much doubt that they are going to get very much money," he said.
Vaughan added that he is interested to see where Fair Play on Fees' case will fit in with Commerce Commission changes made in recent years.
He said that Commission looked at similar areas in 2010, and found that for over the limit and late payment credit card fee, a fee up to $15 was acceptable but any more than that was not.
"And that was a real line in the sand for them. So as to where this fits in with them and what Andrew's group is doing will be interesting to see," he said.
Vaughan also said in that Commerce Commission told him that they "weren't clear under which law this [case] would be taken".
But he also pointed out that the consumer has nothing to lose by registering with Fair Play on Fees.
"You don't pay anything up front and you obviously have a chance of potentially getting some money back, so no there is nothing to lose for the consumer.