Court documents have shown the bank now embroiled in the largest class action in Australian history could have seen it coming.

The ANZ bank knew as far back as 2006 that trouble may be brewing, according to reports into the ongoing war between the bank and a collective of 38,000 customers.

The stoush is over charges to thousands of ANZ customers for a period of seven years.

The central point in the legal argument says the fees can be considered penalties, and are therefore illegal.

ANZ is accused of gouging fees of $20 to $45 for banking services which would have only cost the bank a few cents.

Internal documents shown in court say that ANZ management realised it would have to adjust the fees or face legal action, the latter is now occurring.

Other papers show the ANZ board had a number of concerns about adjusting its fees, even considering increased account servicing fees to offset the lost revenue from the massive fees.

An ANZ document titled Exception Fees Strategy September 2008 shows some of the discussion around appeasing customers without hurting the bottom line.

“Actions to address political concerns and improve customer experience include - new exception fee-free account, new ATM warning message and low-balance text alerts,” the executive summary said.

“Strategies to cover revenue gap include - changing the mix of honour and dishonoured transactions, increasing the monthly account service fee.”

Documents dated 2006 say the bank was looking at the profitability of fees, and talking about the ways revenue would be affected if fees were reduced.

The minutes of a management board meeting in 2009 clearly showed the ANZ accepted the possibly illegal fees as a legitimate source of revenue, and that chief executive Mike Smith was carefully monitoring media reports and public interest to see what should be done.

“Recommended changes would remove revenue of $160m in Retail and $9.5m in Commercial,” the official document said

“Changes will be required to fees anyway due to the changes in the regulatory environment come 1 Jan with the introduction of the Unfair contracts legislation. We are taking into consideration what is the highest fee we can charge when these changes come into effect.

“Total exception fee income in Australian (sic) is $300m and we are giving up ~50% of these in this recommendation.”

The case is now awaiting the final decision by Federal Court Judge Michelle Gordon.