Crikey contributor Adam Schwab wrote in the newsletter yesterday that the Victorian Civil and Administrative Tribunal held that a $40 late payment fee imposed on him by Citibank was an illegal penalty and therefore unenforceable.
Citi did not defend Schwab's application and paid Schwab the $40 and a claimed $135 in damages prior to the hearing.
Schwab wrote in Crikey that any fee charged by a financial institution must be a fair reflection of the loss suffered as a result of the customer's breach. He also argued that the relative bargaining positions of the parties is grossly uneven, with the institution able to directly charge any fee it sees fit without any course of appeal or mitigation by the customer.