Omni Bridgeway backs $144 million merchant fee class action against NSW Government

Omni Bridgeway is funding a class action against the New South Wales Government over approximately $144 million in merchant fee surcharges collected on an estimated 92 million transactions, despite repeated legal advice that the charges were unlawful.

The proceedings, conducted by Piper Alderman, seek compensation on behalf of individuals and businesses who paid surcharges when making payments to NSW government agencies, including Service NSW and Revenue NSW, using credit cards, debit cards or PayPal. The claim covers fees paid between September 23, 2020 and September 23, 2026.

The litigation follows an October 2024 admission by the NSW Government that agencies had unlawfully collected approximately $144 million in merchant fees since 2016. The charges were imposed on transactions involving services such as driver licence renewals, vehicle registrations and other government payments.

According to the government's announcement, the practice continued despite legal advice from the NSW Crown Solicitor's Office between February 2016 and December 2022 warning that the fees were unlawful. The class action alleges that the government received such advice on four separate occasions but continued passing the charges on to customers.

The claim alleges that the NSW Government breached its duty of care to customers by continuing to collect the fees despite knowing they lacked a lawful basis. It also alleges that the government made misleading representations about its entitlement to impose the charges, in contravention of Australian consumer protection laws.

The issue was uncovered during the NSW Auditor-General's review of the Department of Customer Service's 2023-24 financial statements. The government subsequently established a taskforce to discontinue the charges and referred the matter to the NSW Ombudsman for investigation into possible serious maladministration.

Although the government has acknowledged that the surcharges should not have been passed on, Omni Bridgeway said that, as of the filing of the proceedings, it had not confirmed whether affected customers would receive refunds.