Banks in court over credit card fees

The ANZ and National banks have appeared in court to face accusations of not disclosing charges on overseas credit card transactions.

The cases are being brought by the Commerce Commission, which has claimed a number of banks concealed fees worth up to $35 million.

New Zealanders spent $2.45 billion on their credit cards overseas in the year to October 2004, Reserve Bank statistics show.

ANZ pleaded not guilty to the charges in the Auckland District Court today, while National entered no plea. Both matters have been adjourned for a status hearing on June 13.

Eight other banks, including ASB and BNZ, are still waiting to hear if they will face charges.

The Commission has previously said that some banks, though not ANZ or National, charged up to 2 per cent for overseas use of credit cards without informing customers.

Commission chairwoman Paula Rebstock said last Novermber that including currency conversion fees in foreign exchange quotes could amount to misleading conduct.

Under the Fair Trading Act, banks could be fined up to $200,000.

Consumer groups have criticised the way fees are charged.

Credit card companies Visa and Mastercard were ordered to return more than $1 billion in conversion fees in California in 2003 after a judge said the fees were legal but had not been clearly disclosed.

It emerged in the trial that between 1996 and 2000, Visa charged card-holders more than US$630 million in currency conversion fees. The cost of the transactions to Visa was US$6.9 million.

- NEWSTALK ZB, HERALD ONLINE STAFF