Bank Fees Legality

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A transcript of australian banking law.

Transcript of Bank Fees Legality

  • CIIAPTER ONtr _ PENALTIES AT LAWl.l Key findiogs

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    Th eDrgdc olphone bdkire,, EFTPOS. ATMS md Inlemet beking in rsr ye6 ha efleterla [email protected] cbeg iD the bdftins pa$em of Autralim consuDere. A;idid b.!ks have arivetvprcDoted eletrcnjc bdhng mices a5 tow te opriotrs. ffidflng h.+tetuce d,isratre at Lb;bark @ulB alm6l a Lbra ol rhe pasr Aryubl). beks stsnd o mate saving( from rhe* adwn(esD rannoroges. yetlhde is lifile fl ideDce ro 3'row dat d) ofrhe q\ ijgs pRsumabt, berng oade bythe banls @ elDally being pssed onto coasuheB. Indee4 coffme.s [email protected] toG !";"g .;thdvo for the [email protected] prcvided by banks dd brnk fs ue ;rcreasing. dlh* thu d#rin'g], ar a

    This is-pdticlrldly the c8e with regard lo the les in sooe ca*s, as high as S5O - beine chdrged bybarls fo. cEroDd defautts, slch .s cheque or direcr debit dishonous. Ledoral evid;e s;se;th'l bar*s My bo seking to puish cutones for defaults, vhjch raises rhe question ofwherh; thef6 beidg charged by bnks h these drcMstan es m excesive and disproponionate ao the lo$, ifdy, sutreftd by the bdl 6 a Esull ofa cutomd defaur

    It-is a welfstablished lgal principle thar a cdhachul clause lroviding for the [email protected] or p3lDdror a specilied $n of noaey upon brech of mntracl k valid md.rforceable ody if theeontprevided. for k a sftuire pE-esumte of rhe toq titet' lo be jujlercd d a 6ulr ;t be [email protected] ofcoD|I&r' chapre I eminec rhr,leeat pnnc,pte in dtuit We appt) Lhe lesal princ,ptes ro tuexdimfie of lbe fees (MoUy cha.ged by badks for custone. defaulrs, which w; etu.benatry

    13 The led doct ine ofpenalties

    A @ntE t is u rement btweer two parlies io do or nol do various r,hinEs, Contr&l. nav

    cht 'D all sorts of reffi. fs e\dple rhar a plw pmqd. a prod,a o, sen,es. o, [,"r a peny pajuoun pany tG a prodr4l c serccs.

    Oi. rem thal Day be includld ia a cont&t is a reb that, if a pdty bE&hes the cooEact or defaul&in some way, that party nu6l pay lhe orher [email protected]'. perty a su of nodey.

    ' See, for M!re, O Dar r,]/l/116 L^i.E Stst h (wA) pty Lt 1 (rgsj.t 152 cLP. 3ss (O,Daj..lMElu.?:-,:*:1-Lq-l {uri, ' 1q36, ,b? .LR '1a t4vLy-r Dc,. I vnda td^n , ",p*.,"n u ct^n,e(r e39) l66CLR t3l lBz,r'.r.

    A @ntd.tEl ted is liket io be a peiElq, it

    is determtued by the subslance oftheAlsI!!! [email protected] !y !I" 'ubc.ance of rbe lttuL not rbe trme or fom of iL

    l. The _sm io be paid dder the rem by 1be parly in b.oach is dt of aI pmpontutr o. qlfavasdt

    *orbitart d uMciorable h conpdjstr wirh ril lo$ $frercd by he [email protected] pdty;2. The rcldiolEhip treee! the cdt sctjng rFdies, including radols rch d {te rehrive [email protected] ofdre !6nies dd wtetlq tbefe \6 any oplo.tuity to negotiale ibe idr\ is si tbd ;i

    wodd be udscioBble for rh -imcmt', pany b [email protected] th iern.

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  • The )esal pinciples rcsrdins suh clau*s or ,ems .re rclatively well-establishe{L' Suc! a ted isvalid if it p.ovid.s for payment of a sm of money that is a eenuire pe$rimate of the lN ordaDage effded by lhe irroceni party. However, ecordiag lo lhe legal dehine ofpedlties, [email protected] aclaw is lo be distinguisbed fiom a pe.alty cbuq which seels nol ro coqenste tbe im(ldr pdtybut 10 pemlis the othq plrty for the [email protected] or defa'!t. Such pelalti$ arc unenforceable at law-l3.l RMvert of loss ulan i [email protected]

    Cosally spking tu itument party co Mov{ a loss sutlded a a rcsull of a bie&h tbEqgh oneof two @ys. It my bring a gddal &tion for damaels upotr [email protected] of mrtra.l ag4iB1 th othdpdry. [email protected], it day recover a sum of money ude. a claB iD the coDtFlt tblt povids frthe palndt of "liquiilrted [email protected] ', that is a sm that aflels a genuine pe+stitui. of tho l6ssutrerc4 npor the bech.

    Upon a brech of @rt-ac! rhe ilrMenl party is entitled io re.over the acr&a/ /6r sutrsed by i. a aEsuL oflhe othe pdty's breeh, reerrdlers ofwhethd a clause p.oviding for paymot upon thebtwh is uqfircble a a penalty.' Howqor, jf the cbus js 3 pqdly, th. inl'lldt pdity tuotrely d the clae in [email protected] irs etuat loss.a

    This is nol to sy that the imocent party nust first psve the &[email protected] lo6s it ha sqfierd beforc thecourt a dietrnine whethq a cla6e providing for Fymenr upon the [email protected] is a FBlty. Howevd,lhe iDcluion of lbe chse in qustion mul ar the time the contrac! Y6 d1red into, have ben aeeNin, good faith attemp to peestimdte &e los or damages that would be sufftd a a Bdt of [email protected], fism lhe point of viw of a[ panies."

    Tbe courts have held lhal if it h not Dosible to make d estimalion in dve.e of th los io [email protected] lpor a [email protected], a .huie pFviding for payment LLpd the bre&h is les lilly to bo a pdalry.dHow*s, [email protected] n claw My sliU b a pdally, regddless ofthe subjective intmtios oflll pdties, ifrheclaeis monrbleor unonscionrble iD corpdison wi$ tbe los {lTercd.l

    l3J A qGtior of substare, .ot form

    The fi.st Firciple in dehining whelhd a ch6e Btipulating the pa)DeDt of a sm of [email protected] fd [email protected] of coDtact is a perafty, is that ir is a question 'not of wo.d6 or of foDs of [email protected], bur [email protected] ed of ahings'.'

    ti Dnlop [email protected] Tv.e Co LId I i^ (mnsc ohd uotor Co ld lDunlop).lnd Dweiin

    'ltlhe qBrid of whihs a sm stipulated is : penalty or liquidrd [email protected]$ t a [email protected] [email protected] 10 be de.ided npon &e [email protected] @d i.hrdt drcunNLnces of een particul,r cofte!judsed ord ar lh tine oflhe DEkins ofrh. onlract, nor s al lI dne 6r& [email protected]'.t0

    ' Se, for qorle o D.4 above n I al 168 pd cibbs Ct.'. [email protected] aot exepre, AWV-UDC, ahov n I al 215 po D!s&n J.'As above a1 192193 per M:JM &d Wilson J; se also PC Dwloprc4t Ptr Ltd ' R*ll (1991t 22NSWLR 6rs (PC t [email protected]) at 645 Fr Clek JAj &tsl,, Pl, Ltd t BP,lqtralia PE Ltd (2004) 2$ALR 12 (Xtigdl a1 60 pr Cdn &d CE0m lJ.' Dt,]@ PnMh. rw C4 l td v u6 Carucc n.l Matot Ca. Lul lte tl ac 1o,D.nlapt rq7 Ft tadPdke\ CltddM"L E,[email protected] azd Shipbuildins Co y Dan Jase RMN yzq,ie lo I Cdtdheno lrgfsl Ac 6\Cltded.) * 11 w lnd D*ey. Esoda, ^bote n | 61 142 W Wilsn ed [email protected] Jl.'D?.rrrqp. tbove n 5 at 88 per Lord Dudil: al95- pdLord Aiti$on.' O'Dea ahov. a I d ,(ro pd D6e I" cb\.teba.*,*Fveas ot15 ptL&dDN.J, w^te Ca,tpbe [email protected] Co. Lkl y Eri.tEeIr 2lAC600,I

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  • &codt withou! rbe customer having suincienr fdds available i! &eii accout to honou the chesdeor sidile 1,. ha ng a diret debir parmnl prccessed I n fa\ ou ot a rtud parll s Lhou I Lhe cbroberhavirs $ftder! fiDds aaailable in their dccount io honou the pdlment.

    Monlbly accoul serice fees aDd trmsclion fees, lor exanple ATM, EFTPOS o. ltrleaerwiihdrawalc ltuler fe6. @ not l)6iddd by us ro be pdahy lis. As sdch. *tilenudr hsben kitieu aboui rhse sons ofb6k fG, tbey re not the subject ofthis Repon.In p3niculd- ve mnsider penally fees to include:

    Tabk r Pen.l$ Fee

    Dee.!i0tior

    CheqE Dishonou . Outbodd

    Cba.ged by tle b.nk wh6 the customer writes acheque and, at the time the cleque is pqetrtedfor pa,tbot tud p.ocssed the cBtodd dBnol have $fficietrl nDds in Ineir accout rosatis& the moul of the choquj corBequdtly,tne cheque is dishonowd.

    Deposired Cheque Dishonou

    ChcqE Dishoeu - Inbond

    Charged by thc batrk *hen the cunorc. pre*n,sa chcque for delosit into rheir &6ul ed thechqu is subsequently dishonourEd by the

    Cheged by the bdt to stop paymst on acheaue that lhe esromer ba slta& sisned

    Pdiodic Palna! Dishonou.* Chdged by the hdk whetr the culomer hstulho.ied their b&i< to male an eleclronictrdsfer of fuds Aom their ecodt 10 a thi.dpdtyt account e4 at tle time &e paymenl isprocqsed &e cslomer docs not have suitrcientfunds in their accout to etis6, dE mout or t'epalmetr! coseqEndy, the parrdl is

    Dira_t Debit Dishorouf Charged by the bek wbetr the custond naa honsed a third pety to take an ele.rrcnictanslb. of tulds Aom their accout ro the thi.dparty\ &count and. at lhe time the paynem isp.ocessed. the cusloms does not have sufficiorfuds in lhen account 10 etisly the dour of thcpaynerti con*qudlly, the paymeot is

    (where no aprroved oladnn facility or f.cility

    Charged by the bdk who the cutoms wits achequ or authoriss d elet onic tEDsfer ofnDds iom their accoml 10 a third party'saccout d4 at rh6 rine tle pa)dent isprccsrd, lhe custoder does not have s!{!c.idtfiu.ls in then ecomt 10 satisi, he amoul of rhepalrenl howwer lhe p.ynent is .evennelshonowd by tle bak and the aeoul is

    .'-l..-

  • Credit Ced Lati Patmcnl chrsed by tho ba.k wher the customd fails bmake pymet ofthe minimun monlhly paymenrdE oa their trdit cdd accoul's outsrardingb.ldce by the due date for the Dinimd

    CEdit Cdd Ova Limil Chdged by the bank wher lhe amount thai thecustomer spen'15 on &eir crcdit .d exeeds thecutomd's credit ced acmmr mqimum liDir

    ' Somc bank have only o.e 'Disionoui Fe ll)al applies 10 cheqE tud eltrcnic traElr dishonom, qhileods bok nrle difleEnl 16 for chequ. direcr debil ed/d priodic paFoi dhhotroN.

    Tle fe in Table I ffi all payable upd a default of some son by the cstomer This distinguishesFnalty fs from oiier f6 sh as trmsetion fees, morthly asount sewice fees. rhe [email protected] 6dfe or a ctEdit card &coml or the plovision ola rplacedenl cdd or duplicdle aeout sratcmDrThese o$er fes arc imposed d a fee for a ptuduct o. scryice provided by rhe bd c Penty fes, otthe othe. bod re oaly inposed if a customor "defaults" o! their agrcdent with ihe bant.

    For exdple, NAB'S,4 Cti.le to Fea and ChdtEes: PeBaaal Ba"kine Fe6 srates thar a fec isp.yeble for a pqiodic parmenl nor mde dle to l&k ol iiDds" or for a cheque dishonoured due tolack of tuDds." St Geore's Ba* llccornts: lleq ahd Chary* and HN ta Mirinise Then s61cslhal a Pa)ment Honou Fee is ! fee lirr eeh lnnsaction lhal overdF s a cusbmeis accout orincrcd.s rte [email protected] dlrady overdwnsr (wlM there is no prwiosty agred ovsdFfi facilily).wrstpac's Producl Disclosur. Sralement for its pesotul deposit