ACA Lawyers Announce Plans For Class Action Against Telstra Late Payment Fees
Thursday 21 August 2014 @ 12.20 p.m. | Trade & Commerce
ACA Lawyers have announced that they are planning to launch a class action targeting what they believe are excessive late payment fees from Telstra. Currently, Telstra charges a flat fee of $15 if bills of over $70 are paid late, and according to figures from ACA reported on news.com.au, Telstra collected $272 million in late fees in the 2014 financial year.
The lawsuit follows a similarly based class action launched by Maurice Blackburn in the Federal Court earlier this month, which targets late payments on credit cards and is currently the broadest class action in Australian legal history.
Stephen Lewis, the principal of ACA Lawyers, told news.com.au that he wasn’t sure how many customers would choose to join the action, but that the potential pool was a large one:
“Telstra has 16 million mobile services and 7.5 million fixed voice — not everyone pays their bill late, but I can guarantee you most people have paid their bill late at least once.”
He also noted that “the people who are slugged with these fees are generally the ones who can least afford it.” The legal costs are being covered by Harbour Litigation Funding.
Basis for the Action
Similarly to the credit card case currently on foot, ACA Lawyers’ website says they are intending to proceed on the basis that “late payment fees are an unlawful penalty”.
Mr Lewis told the ABC in an interview that:
“The law in this country says that if you charge a late payment fee, unless it's a genuine pre-estimate of the loss to the company caused by the late payment, then it constitutes a penalty and can't be enforced.”
“The only real defence they can mount is the fact that in their view that the late payment fee is a genuine cost to them and represents their true cost.
Now they would have to lead evidence of that, but we know from the bank case that the true cost to the banks in similar situations was a very, very small amount. And it'd be very hard to see a company the size of Telstra justifying a $15 fee on a $70 bill.”
ACA Lawyers also plan to launch similar class actions against Optus and Vodafone.
The Sydney Morning Herald reported that the class action will be lodged in either the Federal Court or the New South Wales Supreme Court, “depending on whether there are breaches of Australian consumer law”.
Reaction
A spokeswoman from Telstra told news.com.au that the company will review the claim when they receive it, but that “[w}e believe our late payment fees are reasonable in light of the costs we incur and we will strongly defend any claim we receive.” Similar statements were reported from Optus and Vodafone.
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