Unfair bank fees live another day. Now time for law reform: Consumer Action and CHOICE

The law must be changed to restore fairness in bank fees according Consumer Action Law Centre and CHOICE.

Following the High Court’s decision today which allows banks to continue charging exorbitant penalty fees, the consumer groups are calling on the Government to tip the balance back to Australians. In the court’s judgment, the chief justice of the High Court suggested law reform might be appropriate.

“Late credit card fees as high as $35 are ridiculous and bear no resemblance to what a late payment actually costs a bank” says Gerard Brody, Consumer Action Law Centre CEO.

“$35 could be the difference between eating and not eating tonight for a family who are a struggling — and let’s be clear here, it’s Australians who are doing it tough who get hurt by the banks’ choices to profit from these fees. You don’t deter people from late payments by driving them further into financial pain.”

“These fees continue to keep rising” says Alan Kirkland, CEO of CHOICE.

“Bank fees have been on the rise for the last three years. In the last year the average household paid $468 in bank fees.  With this decision, we expect the banks to continue their fee frenzy.” [1]

Consumer Action and CHOICE will be advocating for law reform from the Turnbull Government.


Quotes attributable to Gerard Brody, CEO – Consumer Action Law Centre:

“This is an extremely disappointing decision. We’ll be asking the Government to fix this and tip the balance back to Australians. The fees charged by banks and other businesses need to actually reflect the cost and not be used to add to their bottom line.”

“With the Australian Consumer Law under review, this demonstrates another reason why we need unfair contract terms to be a focus of change.”

“The court was actually split on the issue about whether these fees are unlawful, with Justice Nettle finding that the late payment fee was a contractual penalty. Stronger laws are need to prevent businesses from profiting from unfair late payment or penalty fees.”

Quotes attributable to Alan Kirkland, CEO – CHOICE.

“This disappointing decision shows that our laws are not able to protect consumers from the powerful banking sector.

With banks charging out-of-proportion fees and posting record profits, it’s clear that there’s a major issue with competition in the banking sector.”


Examples of penalty fees payable (some banks do not charge these penalty fees on concession-style accounts) – accurate as of 11 April 2016

NAB Credit card late payment fee – $9
ANZ Credit card late payment fee – $20 (no fee if customer holds ANZ Access Account)
Bank of Melbourne Credit card late payment fee – $9
Bank of Qld Personal transaction account dishonour fee – $15
Bendigo Bank Direct debit dishonour fee – $40

Personal transaction account overdraw fee – $25

CBA Credit card late payment fee – $20
HSBC Credit card late payment fee – $30
Westpac Credit card late payment fee – $9
[1] See  RBA, Banking Fees in Australia, 2016 http://www.rba.gov.au/publications/bulletin/2016/jun/pdf/bu-0616-6.pdf and The Australian Bankers’ Association, Fees for Banking Services – 2016 Report which shows that an average household paid $9 in fees each week, or $468 in the year.
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