Are bank fees penalties? Paciocco v ANZ

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On 5 February 2014, Justice Gordon handed down her decision in Paciocco v ANZ, concerning whether bank fees charged by ANZ (including credit card late payment fees and honour and dishonour fees) were penalties or otherwise unconscionable/unfair under relevant legislation.

Justice Gordon determined that credit card late payment fees charged by ANZ to Paciocco were penalties at both common law and equity and therefore unenforceable, but otherwise held that the overdraw honour fees, dishonour fees, non-payment fees and overlimit fees were not penalties or otherwise charged in contravention of the various statutory unconscionable conduct provisions.

Justice Gordon held that the quantum of the credit card late payment fees was extravagant (or exorbitant) and unconscionable in amount, and estimated that the actual damage suffered by ANZ in respect of each fee charged was only between AUD$0.50 and AUD$5.50 (depending on the specific fee), in contrast to the fees of AUD$35 or AUD$20 charged by ANZ. Accordingly, Paciocco was entitled to recover from ANZ the amount of the fee that was in excess of this…

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