The Federal Court of Australia today found that some fees imposed by banks amount to penalties at law, and as a consequence are invalid.

The case was brought in a class action against the ANZ Bank by approximately 34,000 ANZ customers who were funded by litigation funders. The Court rules that late fees on credit cards were invalid, but ruled that other bank fees were not penalties and remained valid.

The Age Newspaper is quoting a figure of $18million as the potential value of incorrectly charged late fees, but this is an issue which the Federal Court will address next year.

Where a Court determines something is a penalty at law it is invalid and the party making the claim is not entitled to recover these amounts.