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| Commonwealth Bank: Australia’s biggest bank is playing catch-up |
Ten of Australia’s biggest banks, led by the Big Four – National Australia Bank, Westpac, Commonwealth Bank of Australia and ANZ – are confronted with the prospect of the biggest class action in Australian legal history. Perth firm Financial Redress, a subsidiary of the Sydney-listed legal services company IMF Australia, which specializes in funding large-scale legal actions, has emerged as the backer of a A$5 billion ($4.2 billion) attack on the Australian banking industry, claiming recidivist overcharging of customers for penalty fees on their overdrafts and credit card debt.
Financial Redress reckons it stands on solid ground. Last year, the Reserve Bank of Australia issued data that showed that banks earned about A$1.2 billion in penalty fees, of the near A$12 billion in fees banks charged customers in 2008.
The Perth firm reckons Australian customers have been overcharged about A$5 billion over recent years, and cites the widespread A$40 charge levied per account for late payments and overdraft fees that it says actually costs banks about A$1 a transaction to process.
With Australian banks reporting record profits, and heavily protected from meaningful foreign competition and takeover by a cosseting central bank, it has become a national sport to attack them.
