Commonwealth Bank of Australia boss Ian Narev says his bank and its New Zealand subsidiary ASB will vigorously defend accusations of unfair and illegal default fees levelled by a legal consortium.
Narev, a Kiwi who took over the top job at CBA in December 2011 from New Zealander Sir Ralph Norris, was in Auckland yesterday to speak to business leaders at a transtasman lunch held at the SkyCity convention centre.
He said the bank was prepared to put right mistakes made in the past if it felt there was wrong-doing, but there were also cases where people who were opportunistic took aim at big corporates.
"We will be prepared to defend this pretty vigorously."
ASB, which last year made a record profit, is just one of a number of banks in the sights of Auckland barrister Andrew Hooker and Australian law firm Slater & Gordon, which on Monday announced they would take a billion-dollar case against the banks going back six years.
Hooker says the banks have been illegally overcharging Kiwis for many years on transactions for overdrawn accounts, late credit card payments and bounced cheques.
He claims the banks have breached contract law by charging a fee that is higher than what it costs them when the payment defaults.
The group said customers were charged $15 every time they overdrew their accounts when they estimate it costs the banks only a few cents when that occurs.
So far more than 16,000 Kiwis have registered to join the campaign.
It has also pointed out that banks' fees vary widely between New Zealand and Australia despite New Zealand's largest four banks all being Australian-owned.
CBA charges nothing for an unarranged overdraft of over $20 in Australia while ASB has a minimum $10 fee. It also has a $12.50 cap on credit card over-limit fees in Australia but in New Zealand customers have to pay $20.
Narev said having different pricing in different markets was just standard business practice.
"It's no surprise to anybody [who] knows anything about business."By Tamsyn Parker Email Tamsyn