Telstra targeted for class action against late fees

ACA Lawyers is seeking to get Telstra customers on board a new class action suit targeting the company's late fee charges.

The case follows a similar case lodged against ANZ, Citibank, and Westpac over credit card late fees earlier this month, after the Federal Court ruled in February that ANZ's late credit card fees were a penalty and did not reflect the actual cost to the bank.

ACA Lawyers principal Steven Lewis said that Telstra's AU$4.3 billion profit result last week was built in part from AU$272 million in revenue collected through "late fees and other miscellaneous fees".

"Since 2000, hundreds of thousands of Telstra customers have paid late fees in the mistaken belief Telstra was entitled to charge the fee," he said in a statement.

"But a recent court decision in relation to credit card fees found that late payment fees charged by banks are unlawful and that clients are entitled to get most of their money back."

ACA says Telstra currently charges an AU$15 late fee if the billing amount owed is AU$70 or more.

ACA Lawyers said it had the backing of UK litigation funder Harbour Litigation Funding, and would also seek to target Optus and Vodafone in the future. Those who choose to participate in the class action will have no up front cost, but Harbour Litigation Funding will take "a percentage" of the damages if any are awarded.

In a statement, Telstra defended its late fee system.

"We will review the claim when we receive it. We believe our late payment fees are reasonable in light of the costs we incur and we will strongly defend any claim we receive," a spokesperson for the telco told ZDNet.

Launching class actions against telcos is not always successful. The last attempted class action against a telecommunications company in Australia has been stalled for four years, with Piper Alderman and litigation funder LCM failing to get its class action against Vodafone off the ground to date.