Ten thousand sign up for $1b bank fee lawsuit

More than 10,000 people have registered to join a billion dollar legal case against New Zealand's major banks in less than 24 hours.

Auckland barrister Andrew Hooker who is leading a law suit to fight what he claims is illegal and unfair default fee charges said the take up had been "enormous".

"I didn't have any expectations because I have never done this before."

But he said Australian law firm Slater & Gordon which is backing the case said the take up rate was two or three times that of the sign-ups for a similar case in Australia.

Yesterday Hooker said the group needed at least 10,000 people to sign up to go ahead with the case and he said the overnight response meant it was now a "foregone conclusion" that the legal action would proceed.

Hooker said he hoped to file legal documents in the High Court at Auckland within a month.

The group had yet to extrapolate data on which bank had received the most number of customer registers but he believed it would be representative of their market share.

The ANZ is the largest bank in New Zealand. In Australia a similar case against the ANZ is the first in a test case being taken against up to 12 banks. This legal action has been going since May 2010.

Hooker said an important win against the ANZ came in November when the High Court of Australia ruled that unfair bank fees could be considered penalties.

That case is headed back to the Federal Court.

Hooker said the ANZ's size did not necessarily mean it would be the first bank it targeted.

"We simply don't have enough information yet to know who will be the first bank off the ranks."

Hooker yesterday estimated the case could attract 50,000 New Zealanders to sign up and this morning said he would be happy "if we hit six figures."

He said the response from people registering indicated Kiwis were "quite grumpy with their banks."

The case is being taken on a "no-win no-fee" basis with Australian litigation funders Litigation Lending Services paying for the case and taking a 25 per cent success fee.

The banks have declined to comment individually on the case but New Zealand Bankers Association chief executive Kirk Hope said the legal action did not appear to take into account the differences between New Zealand and Australian law.

"There isn't such a thing as a class action in New Zealand."

Hope said three out of the four fees being targeted under the lawsuit were already regulated by the Commerce Commission.

"They [Commerce Commission] have previously taken action against the banks. If they think there are issues they will certainly look at them."

Hope said banks were willing to work with their customers on fees and if customers were not happy they could just switch to another bank.

"We know the sector is pretty highly competitive."

New Zealand banks had a combined net profit of $16.4 billion in the past six years but Hope said non-interest income earned by the banks had been declining in recent years.

Bank fee class action

Who can register?
Anyone who believes they have been overcharged exception fees. Register at www.fairplayonfees.co.nz

What fees are included in the class action?
•Honour fees when there are insufficient funds in an account to meet a direct debit payment or cheque. The bank pays the money but then charges a fee.
•Dishonour fees where a person is charged for going into overdraft which has not been arranged.
•Late payment fees on a credit card.

How much does it cost?
There is no upfront fee but the company funding the action, Litigation Lending Service, will take 25 per cent of any payout.

How long will it take?
The company funding it estimates it could be two to three years.