ANZ continued to charge customers fees to raise revenue under a different name while avoiding scrutiny from the financial regulator, a court has heard.

Thousands of customers have brought a class action against the bank to recover honour, dishonour, late payment and over-limit fees they argue are unfair penalties rather than service fees, which did not reflect the cost to the bank.

The case - the first of its kind against a big bank after a High Court decision paved the way last year - began in the Federal Court in Melbourne on Monday.

Michael Lee, SC, for the 43,500 customers, said in his opening address the bank had renamed its ''exception fees'' as ''service fees''. In 2008, changes were introduced to a law governing the powers of the Australian Securities and Investments Commission. These proposed that exception fees were limited to cost recovery.

Mr Lee read out sections of a range of high-level internal ANZ documents between 2006 and 2009 detailing the bank's plans to change the name of its exception fees to a ''fee for service'' and referring to strategies to fill the ''revenue gap'' left if they needed to be capped.

''This was a guise to continue to charge exception fees … by changing the nomenclature and creating a fiction of providing a fee for service,'' Mr Lee said. ''It was a recognition in these documents [that the bank's approach was] 'We're dressing it up and for one reason alone - because we know regulators wish us to cap them at costs.'''

Minutes from an ANZ management board meeting on September 7, 2009 stated that fees needed to change anyway because of other law reforms: ''We are taking into consideration what is the highest fee we can charge when these changes come into effect.''

Lead claimant Lucio Robert Paciocco has an ANZ home loan account and cheque account for his business, Speedy Development, and credit cards with other banks.

He told the court he had authorised the bank to make various payments from his account.

Mr Paciocco conceded that since obtaining an overdraft facility on one of the accounts, he had run it close to its credit limit but said this was not his practice.

''What I'm suggesting is it was convenient for you to proceed in this way and take a risk you would incur a fee?'' ANZ barrister Alan Archibald, QC, asked.

''Yes,'' Mr Paciocco replied.

He said he made an ''inadvertent mistake'' in going over the limit, as he made payments assuming there was money going in or already in the account.

He agreed he would prefer that the bank had processed the payment if he were to incur a fee for going over the limit when making a payment. The case continues.