Class Action Lawsuit against Australian Banks for Overdrawn Fees

[stevo_gj]

Hey guys,

 

I just found out about this class action lawsuit against all the big aussie banks. Basically the $40-$60 charge you get for overdrawing your account isn't really legal.

 

The way it works is you sign up and if they win the class action then all the participants get their overdrawn charges back plus interest that would have been accrued on them. The law firm gets 25% of this to make it financially viable for them. If they lose the lawsuit then the lawfirm carries the costs and you pay nothing.

 

I figured a few of you would be interested in signing up as well. Here's the site:

 

http://www.financialredress.com/

[Mr240z]

Have you been overdrawing your account again Stevie boy....Naughty

[herrods]

"The registration process will not take long, and there is nothing to pay at all unless you successfully recover compensation. IMF will fund all the costs, for which it will receive its money back and a 25% share of any compensation received. You have everything to gain, and nothing to lose."

 

The IMF will fund all teh costs, for which it will recieve ITS MONEY BACK and a 25%share of any compensation received.

 

As far as I can tell what that actually means, is that whatever the legal bill comes to, which in something this large will be monstrous, is what IMF gets, PLUS the 25%.

 

If they split the bill evenly between all the parties, because all the parties have been equally represented, then you may find that your $60 bank fee is refunded to you less $40 for your share of the legal bill, less 25% (for example)

 

Which means unless you are getting slugged once a week for the $60, you end up coming out about the same as where you had been when you started out.  Because when you are represented, your $60 in overdrawn, is represented equally with the guy down the road who has $5000 in fees to claim.  So because the representation was equal, the split will be equal, but mr $5000 still comes out on top.

[stevo_gj]

I guess it goes without saying that if you have more fees then you are going to be better off.

 

Even in your example with (60-40)*0.75 you still get $15 back. The alternative is to not sign up and get nothing back. I don't understand what your point is?

[sco_aus]

BE very very careful.  I just read the fine print on this and a) I may have miss read it, but it seems that you pay 25% to IMF, however you also pay for the legal fees to scale to your claim amount, and b)If you decide to opt out, you will have to pay for the legal fees that have already been accrued...

So, if I did read it right, you may end up getting even less, or maybe actually cost you money. 

[stevo_gj]

So, if I did read it right, you may end up getting even less, or maybe actually cost you money. 

 

I'm not sure it will cost you money, but it does make sense they take more than the 25% as herrods pointed out.

 

That opting out clause isn't ideal, but I guess they have to protect their investment. If lots of people pull out because the banks bribe them or whatever then they will lose a lot of money on it so they need to make it expensive to do so.

[sco_aus]

Yeh it is reasonable, but it is not made obvious...  I don't like lawyers.. lol.  I have submitted a query to them to find out if I am correct, so I will update this when I find out.  Hopefully its not some dumbsh!t who has no idea, replying to it.

[Toecutter]

poor banks

[620Z]

As usual the big winners out of all this are the law firms. 

[sco_aus]

So here is the reply, read carefully... Tricky wording again

 

"Dear Scott,

 

Thank you for your enquiry.

 

If IMF are successful via either a judgement or a settlement, IMF will recover its legal (and other) costs first, and then take a 25% commission. The remaining 75% will be split up amongst all the clients on a pro-rata basis.

 

If you decide to opt out, then you will have to pay the same fees (and commission) if we are successful in recovering money for you."

 

 

In other words, they get their legal fees back from the money that has been won, then they take another 25% of the remaining money, then the remaining 75% is split between the clients.

 

So if they win $1 mill from the banks, and it costs $950,000 in legal fees, they get that back, take 25% of the remaining $50k then split the rest with the client...  So I wonder what happens if the legal fees are higher than the amount won?  Where do they recover their money?  The client..  Something to consider anyway.

[stevo_gj]

That was quick! Ask them what you just said, what happens if the legal fees are higher than the money won!

[sexual_sushi]

Apparently with pro bono work they can't ask for more money than what is won. I'll get the gf to have a look over it and see what she thinks (pros to dating a law student and not just A student Steve hahaha )

[peter t]

One simple solution lads. If you don't have the cash don't spend it. Works for me.

[sexual_sushi]

Haha I agree Pete but the banks systems are out of date. A payment will come out of our account that you weren't aware of and you got transfer money to cover it but it won't go in until the next day. Hardly seems fair since the technology they use is from the 80's. Also the people who are getting these fees are the people who are just barely surviving on their money so getting charged $40-60 for each transaction will really eat into their money for the next week and starts the cycle all over again. I remember what it's like trying to live on $300-400 a week!

[stevo_gj]

Haha I agree Pete but the banks systems are out of date. A payment will come out of our account that you weren't aware of and you got transfer money to cover it but it won't go in until the next day. Hardly seems fair since the technology they use is from the 80's. Also the people who are getting these fees are the people who are just barely surviving on their money so getting charged $40-60 for each transaction will really eat into their money for the next week and starts the cycle all over again. I remember what it's like trying to live on $300-400 a week!

 

exactly.

[Huw]

For the record.....in most states of Australia (definitely Victoria) it is illegal for a law firm to use that type of charging (contingency fee)....and can get you struck off the roll. You cannot take a percentage of an award from the court (not in so many words anyway....) as you are no longer charging for your work but the award itself (if that makes sense - ethically dubious). That form of fee is very popular in the states and the foundation of many class actions (and class action firms!) but illegal in Australia.....what they can do is have a 'boost provision' in which they charge what are essentially kicked up fees for their workupon success.

 

So in essence, No win - No fee is possible but very highly regulated. Can have a 'boost' but not a 'cut'

 

Mind you, if it not a law firm footing the bill it not a problem and would be nice to see the banks get a bit of their own medicine.

It appears from this that the basis of the agreement is that a large institution (IMF) funds the action and pays the lawyers but take the higher cut of the award (as the major sponsor of the action).

 

As a poor student it always felt like I was getting robbed (which I was) when hit by those fees on the weeks that their was no money in my account (blame the Zed!)

 

Sorry if off-topic...just thought the fee issue worth clarifying.