WELLINGTON, March 11 (Xinhua) -- New Zealand's registered banks are being targeted in what is set to be the country's biggest ever class action lawsuit as three law firms attempt to reclaim " excessive" bank default fees for bank customers.
The legal action by New Zealand lawyer Andrew Hooker, Australian class action experts Slater and Gordon and litigation funder Litigation Lending Services (NZ) will claim the banks unfairly charged around 1 billion NZ dollars (821.89 million U.S. dollars" in fees over the past six years.
More than a million New Zealanders were eligible to join the Fair Play on Fees action, Hooker said in a statement Monday.
"Customers are charged an average of 15 NZ dollars every time they overdraw their accounts, pay their credit card late or bounce a cheque when the cost to the bank is actually just a few cents," he said.
The case would be based on a principle of contract law that a default fee was an unenforceable penalty if it was higher than what it actually cost the charging party.
"We understand that a bank is a business and they have to charge fees. But these fees also have to be fair and lawful. That is what this class action is about."
Hooker said customers had been helpless against the banks for years and a class action was the only way to hold the banks accountable.
"Banks are in the privileged position of having access to customers' funds and can just extract these fees from customers without much of a right of reply. They have also relied on individuals not making the effort to take the banks to court."
The litigation will be structured so that claimants had no upfront costs and would be fought on a "no win, no fee basis."
New Zealand's four biggest banks are Australian owned and the fifth, Kiwibank, is owned by the New Zealand government.
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