I’m well aware that there are many things in life that I pay for where I’m not just simply covering costs.

I know that when I go to a restaurant I’m not paying stupid money in corkage fees to cover the ten seconds it takes some guy to open a bottle.

I know that when I pay a parking fee it’s not because the local council are claiming they lost an entire days revenue in the few minutes I was running late.

I know that when I forget to return a book to the library on time I’m slugged with a late fee, despite books being free to loan out.

And I certainly know that when I forget to pay the minimum balance on my credit card, that there’s no way known the bank has lost the amount their charging me for missing payment. If anything they’ve made some money due to interest and the fact that I’ll wind up paying the balance whenever.

Hundreds of thousands of Australians however seem to think that being charged for being lazy, ignorant or forgetful is a bad thing.

Over the past five years Australia’s banks have raked in an estimated five billion in exception fees, or roughly $224 per person living in Australia.

Thing is though, we’re talking aboutexception fees. This isn’t your mandatory account keeping fee, interest payments or credit card fees, exception fees are completely avoidable.

You are hit with exception fees when you overdraw your account, miss a credit card payment, default on a loan or exceed your available credit limit. There’s a whole host of reasons you can be hit with excess charges but one constant remains the same, you have to stuff up somehow in order to be charged.

Law firm Maurice Blackburn recently announced that they were going after Australia’s banks and their exception fees in a class action lawsuit. The class action lawsuit, bankrolled by IMF Australia, argues that the amounts charged by banks in exception fees  is illegal because they are  ‘out of all proportion to the actual cost incurred by the banks‘.

Maurice Blackburn chairman Bernard Murphy said that “under contract law in Australia, penalty fees charged must reflect the damages suffered by the bank.

Banks had levied punitive charges, not merely recovery charges. If the fees did not reflect the cost to banks of the breach, they were illegal.”


Sounds to me like an extremely grey area and more of a targeting of people who want to ‘get back’ at the banks then anything. With the GFC going bananas what better time to launch a class action against the banks?

This sentiment is reflected in the numbers of disgruntled bank customers who have registered interest in the suit so far, currently 22,000. With no cost to register interest in the case and IMF funding the class action suit on a ‘no win no fee’ basis it’s quite probably that Maurice Blackburn will get the 500,000 punters they are projecting to join the class action suit.

For those rubbing their hands with glee, IMF have predicted that

realistically if we got 300,000 to 400,000 people to sign up over the course of the next few weeks and months we’d have a sort of $600, $700, $800 million class action.


Now I’m not exactly sure how these things work but if IMF got $800 million dollars awarded to them with 400,000 people in the law suit, they take 25% ($200 million) which leaves 400,000 people sharing $600 million.

This is $150,000 each (what the hell?)

With absolutely no financial risk involved to people joining the action and a national attitude of ‘banks are fuckers’ it’s easy to see how these numbers could come about.

So confident are Maurice Blackburn with their lawsuit that they’ve publicly announced that their gameplan is simply to hope that the banks simply roll over and ‘enter into settlement negotiations‘ before anything is filed.

I for one won’t be joining the action, despite having paid my share of exception fees over the years (but well below the $224 yearly average). Exception fees largely exist to deter people from mismanaging their money. It’s a financial incentive for account holders to be somewhat financially responsible.

If we assume for a second that this law suit goes ahead and that Maurice Blackburn win, just what kind of precedent are we going to set?

Imagine how much worse the global financial crisis would be if the only incentive to not overdraw your credit card was the half a cent of power it took for a computer to realise. Or that for missing a mortgage repayment the banks only charged you the $10 in lost manpower it took for some guy to call you up to find out why.

It’s catch 22. Banks are getting money for nothing in exception fees but they also exist as a deterrent for people to watch their money.

How about Australians stop looking for someone else to blame and start managing their money responsibly?



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