An Australian court began hearing what is said to be the country's largest class action case on Tuesday with tens of thousands of consumers fighting back against US$231 million in bank fees.
The lawsuit against the Australia and New Zealand Banking Group (ANZ) is part of a larger class action against eight major lenders, with 170,000 consumers alleging that their penalty charges are excessive and illegal.
Lead lawyer Andrew Watson said the case, which could have huge ramifications for consumers, would claim that fees for services like account overdrawals were "out of all proportion" to what it costs to provide them.
"The banks have been charging excessive fees for many years now and this case will be a real test in the High Court of the extent of the doctrine of penalties," Watson told ABC television.
"We're arguing for an expanded doctrine, one which looks at the reality of these transactions."
Watson said a win would have "incredible implications" for the 170,000 customers who had joined what is said to be Australia's largest class action, asking that the banks repay Aus$220 million in "extravagant" penalty fees.
"More broadly it will have an impact on banking customers right across Australia, and for consumers in relation to all sorts of transactions," he said.
According to documents filed with the High Court on behalf of 38,000 ANZ customers, the case hinges on a "variety of fees for overdrafts, overdrawn accounts, dishonour fees and overlimit credit card accounts".
The lower-level Federal Court ruled in December that only four classes of fees falling under ANZ's late payment schedule relating to credit cards merited being characterised as a "penalty" that could be contested in court.
ANZ was cleared over four other classes covering over-drawing from accounts and having insufficient funds to make scheduled payments, in the case first launched in 2010.
Maurice Blackburn, the legal firm representing the customers, has appealed to the High Court seeking a broader finding of what constitutes a penalty in the hopes of expanding the case against the banks.
ANZ had welcomed the earlier ruling, which was largely in its favour, and said it would vigorously defend itself.