NAB customers may have fees refunded following court settlement
NAB customers who have received a late payment fee may be eligible to have that fee refunded after the Big Four bank agreed to reach a settlement with a group of customers.
The court orders, given in the Federal Court yesterday, will enable any NAB customer who has received a late payment fee from the bank to register to participate in the settlement.
The decision comes after a string of class actions against Australia’s financial institutions, in which exception fees were held to be questionable.
The first judgment was given against ANZ in February, following a 2012 High Court ruling which declared its late payment fees were unlawful, but upheld the validity of overdraw fees.
Action has since been taken by groups of customers against the Commonwealth Bank, Westpac, Citibank, St George, Bankwest, BankSA and NAB.
NAB is the first bank to agree to settle the dispute out of court.
The late payment fees have been deemed invalid by the courts under the common law ‘penalty doctrine’, which applies to contracts. The doctrine states that a fee which is designed to penalise a party for breach of contract is invalid if it enforces a penalty greater than the loss caused by their breach.
Paul Gillett, Senior Associate in the class actions team at Maurice Blackburn that brought legal action against NAB, said the bank’s decision to settle with customers was an important early step in securing a settlement for bank customers who have been wrongfully charged.
“The court has enabled negotiations to progress productively, which is a positive outcome for NAB customers who have been hit with these fees.
“This is evidence that Australia has a mature class actions regime which is able to provide meaningful remedy to people on a mass scale, whilst providing a necessary check on corporate conduct.”
NAB customers who believe they may be entitled to compensation should register at Financial Redress. Registration opens on November 25, and will close on January 27 next year.
If you’re not with NAB, you can still try to minimise the amount you pay in bank fees each year. Check out Mozo’s guide on Beating bank fees and find out how.