Bank Beaters

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You won't find him bashing the banks, but Adelaide solicitor Richard Armour is certainly beating them at their game of charging outrageous and unjustifiable fees.

For nearly two years his 'No win, no fee' company www.bankbeaters.com.au has been notching up wins for scores of disgruntled South Australian bank customers.

"We've had more fantastic news. Some financial institutions and one of them is a major bank and one of them is a major credit company has been very responsible and have come to the party very quickly and we've been able to negotiate arrangements with them for full refunds with our clients" he says

Now others are lining up and sending shivers down the spine of the banking industry.

People like Adam Schwab who received a $40 late fee on his Citibank credit card. The furious solicitor went to the Victorian Civil and Administrative Tribunal arguing the fee was in breach of the Fair Trading Act.

"The fact that VCAT has agreed with the submission that bank fees, in this case, was a penalty fee and therefore un-enforceable should set, if not a legal precedent, something that can be followed down the track by mums and dads and people who've had bank fees but just haven't known what to do" he says

The Tribunal ruled the fee was not a fair estimate of the banks loss - particularly considering interest charges were close to 20 per cent. The bargaining positions of the parties were also found to be grossly uneven, because Citibank direct debited the amount without consultation.

"If this VCAT judgement says anything, it's the fact that people out there do have the power to challenge a fee, if you have any fee at all call your bank, if they don't refund it take action" Adam suggests

The Consumer Action Law Centre's Gerard Brody believes the victory is an Australian legal first.

"These fees really do hit the budgets of people, particularly low income people in our society, and they are unfair so there really is the incentive there for consumers to go out there and claim them back" according to Gerard

For its part, Citibank say all fees and charges are clearly explained to customers, while taking the VCAT ruling seriously, it's reviewing its legal options and they probably won't be the only ones

Richard Armour estimates it costs a financial institution about 50 cents to process unlawful penalty fees - nowhere near the $30 or $40 dollars we're usually slugged with.

"There are some statistics that are suggesting that banks in Australia alone are making up to 12 million dollars a day from these fees" Richard warns

Last week Britain's Office of Fair Trading was given authority to decide if overdraft charges are unfair...the High Court decision has the country's financial industry reeling. The test case, prompted after hundreds-of-thousands of customers took legal action over exorbitant fees, will have wide spread ramifications. If upheld, British banks may be forced to return billions of pounds in fees taken from consumers. They have until May 22 to appeal the decision.

Closer to home, Reserve Bank of Australia figures reveal local households were stung over 4 billion dollars in fees during 2006 - up 352 per cent in ten years, but it's a figure easily reduced according to Adam Schwab.

"If NAB has 100,000 customers come tomorrow and contest their fee, they probably won't bother charging fees any more, it won't be worth it for them"

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