A trans-Tasman grouping of legal firms calling itself Fair Play on Fees estimates that as many as 1 million New Zealanders are eligible to join the class action.
Lead lawyer Andrew Hooker says the lawsuit, against the big four Australian-owned banks and Kiwibank, seeks to recoup excessive penalty payments taken by the banks over the past six years.
He says the average fee for an overdrawn account, late credit card payment or bounced cheque is about $12.
"This is despite these transactions costing banks just a few cents," he said.
The class action will argue that under contract law, collection of excessive penalties is illegal.
The group hopes to launch its action within a month.
Similar action is already underway in Australia.