customers may sue banks over rates hold

Might be worth reading your contract.



Australia's big banks could face legal action over their refusal to pass on the Reserve Bank's cut to official rates by 25 basis points on Tuesday.

Lawyer John Mahoney says he is seeking home buyers to support a case.

He has told Channel Nine he believes mortgage contracts carry an implied term requiring banks to reduce interest rates in line with movements in official rates.

"That's been developed over 40 years - there's a 40 year convention, understanding, agreement," he said.

"The banks have now breached that."

Mr Mahoney says he is seeking home buyers to support a legal challenge.

"The mortgage contract is a contract and we believe that implied into that contract is a term that requires the banks to reduce variable interest rates in accordance with the Reserve Bank movements in the cash rate," he said.

abc online