Norway’s consumer council (Forbrukerrådet) won a green light on Friday to move foward with a massive class-action lawsuit against Norway’s biggest bank, DNB. The council, on behalf of DNB customers, is demanding that the highly profitable state-controlled bank refund NOK 690 million in fees charged on its investment funds.
“We are happy and relieved,” Jorge Jensen, a director of the consumer council, told Norwegian Broadcasting (NRK) Friday afternoon after an Oslo appeals court refused to hear DNB’s appeal and cleared the way for the lawsuit to proceed. A lower court had earlier approved the class-action suit, but DNB, which has faced a string of problems in recent years, had appealed.
The bank lost, and Jensen is now ready to sue DNB for allegedly cheating customers into paying management fees on their investments in various funds that were far too high. The funds include “DNB Norge,” “DNB Norge I” and “Avanse Norge I.”
The council intends to sue on behalf of as many as 180,000 funds customers at DNB. “DNB has charged fees for a service it did not deliver,” Jensen claims. “They have marketed and priced several of Norway’s larges stock investment funds actively, but the funds have been managed passively.”
DNB denies the charges and appealed the consumer council’s initial victory in the Oslo City Court (Oslo Tingrett). “DNB’s appeal was an attempt to avoid these customers being able to demand refunds of NOK 690 million (USD 82 million) because they had paid for something they didn’t get,” Jensen said.
DNB can still appeal to Norway’s Supreme Court but it remained unclear whether it will be heard after an appeals court saw no grounds for it. “We have just received the news that the appeals court has rejected our appeal,” DNB spokesman Vidar Korsberg Dalsbø told NRK. “We will now spend some time going through their reasoning.”
The lawsuit will be the largest class action in Norwegian history and may have implications for funds customers in other countries as well. “This problem with passive funds that are marketed as being actively managed comes up in several countries in Europe,” Jensen told NRK. “Lists are now being published all over Europe of what funds are involved.” That may lead to class action suits being filed on behalf of customers abroad as well.