Australian banks brace for class action

IMF Australia to represent 500,000 Australians in accusing lenders of illegally charging US$4.5bln for minor violations.

Australian lawyers preparing a class action against allegedly excessive penalty fees charged by the country's banks Thursday predicted half a million people would join the suit.

Bernard Murphy, chairman of the legal firm leading the action, said 1,000 Australians had signed up every hour since Wednesday's launch, calling it an "astounding response".

"We're the largest class action law firm in the country and we've never seen a response like it," said Murphy, of Maurice Blackburn.

The class action will allege Australians have been illegally charged more than US$4.5 billion in bank fees over the past six years for relatively minor infractions such as going a few dollars overdrawn.

The suit, to be funded on a "no-win, no fee" basis by litigation founder IMF Australia Ltd and its subsidiary Financial Redress, will claim the fees are excessive for what are essentially mere contract breaches.

"Realistically if we got 300,000, 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 (dollar) class action," Financial Redress managing director James Middleweek told public radio.

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