Customers on low incomes will be refunded more than $28 million, after banks were found to have knowingly kept them in high-fee accounts.
An Australian Securities and Investments Commission (ASIC) investigation found four Australian banks systemically charged high fees to those customers who could least afford it.
ASIC Commissioner Alan Kirkland said the ANZ, Bendigo and Adelaide Bank, CBA and Westpac kept at least two million Australians on low incomes, including many relying on Centrelink payments to make ends meet, in high-fee accounts.
Commissioner Kirkland said the banks had caused financial distress through avoidable fees and complicated bank processes, often creating barriers for regional and remote consumers.
He said banks knew many of these customers on low incomes were in inappropriate high-fee accounts.
“Before our review, most banks only provided their customers with difficult ‘opt-in’ processes for switching to low-fee banking options, including forcing some consumers to travel hundreds of kilometres to their nearest bank branch.”
Commissioner Kirkland said that while the ASIC review was focussed on improving financial outcomes for First Nations consumers by addressing avoidable bank fees, the findings had resulted in broader outcomes for people on low incomes nationwide.
“Following ASIC’s review, the banks have migrated more than 200,000 customers into low-fee accounts, saving these customers an estimated $10.7 million in future yearly savings.”
He said banks would also return over $28 million in fees to these customers over the next 12 to 18 months, “including $24.6 million to be refunded to customers receiving ABSTUDY payments and those in areas with significant First Nations populations”.
