Major banks hand over millions in refunds over unfair fees
Four major Australian banks are set to cough up close to $30 million in refunds to low-income customers after the Federal corporate watchdog revealed a pattern in high fees.
A new report from the Australian Securities and Investments Commission revealed ANZ, Commonwealth Bank, Westpac, as well as mid-tier Bendigo and Adelaide Bank kept at least two million low-income customers in high-fee accounts.
Many of these low-income earners rely on Centrelink payments, and were unfairly slapped with unreasonably high fees.
The report followed an ASIC review which focused on improving financial outcomes for First Nations customers by addressing avoidable bank fees.
“We focused in this project on the banks who were most likely to have First Nations consumers on low incomes trapped in high-fee accounts,” ASIC commissioner Alan Kirkland said.
ASIC said the four banks have committed to moving more than 200,000 customers into low-fee accounts, saving them about $10.7 million a year, with the financial institutions also committed to refunding over $28m in fees to these customers over the next 12 to 18 months.
This includes $24.6 million to Aboriginal and Torres Strait Islander students and apprentices receiving ABSTUDY payments, and customers in areas with significant First Nations populations.
“At any time ASIC, and the community, expects that the banks will treat their customers fairly,” Mr Kirkland said.
“But that’s particularly important for people on low incomes and for people who are struggling to make ends meet, the last thing they need is to have the very little income that they have being eaten away in unnecessary bank fees.”
Mr Kirkland added that the implications of ASIC’s latest review applied to all banks across the country.
“We’re expecting all of them to read the report and make improvements to their practices to stop other people being trapped in high-fee accounts that they can’t afford,” Mr Kirkland said.
Image credits: Shutterstock