Australia's High Court unanimously allowed a class action representing 38,000 ANZ customers to challenge a wide range of "exception fees".
They're arguing that fees of around $25 were too much for misdemeanours like dishonouring payment or having an overlimit account.
An earlier ruling had limited the scope to late payment fees only, and excluded honour, dishonour, non-payment and over-the-limit fees, since it could not be classified as "penalties".
The court ruling overturned the decision, ruling the ANZ customers can return to the Federal Court to challenge a fuller range of fees.
"It will be for the Federal Court on the further hearing of the matter to decide whether these exception fees are penalties," the High Court said in their ruling.
The lawsuit was initiated by 38,000 customers of ANZ Bank which eventually expanded to a class action suit that involved 170,000 customers and eight banks, including the Commonwealth, Westpac and NAB.
They are together claiming A$223 million in "unfair" bank fees should be returned.
A decision in the case could have wide-ranging implications for banking in Australia and affect more than just ANZ customers.
ANZ Australia chief executive Philip Chronican said the bank would continue to defend the case vigorously.
He downplayed the reduction and scrapping of the controversial fees as an admission that ANZ has been overcharging customers.
"Many businesses change their price structures . . . I don't think you can read anything into the fact that these decisions were made three years ago," he added.
Do you know more about this story? Contact us anonymously through this link.