Australians affected by unfair banking fees are set to receive a total of $60 million in refunds following a major enforcement action by the Australian Securities and Investments Commission (ASIC). The refunds target low-income and concession customers who were placed in high-fee accounts despite the availability of cheaper options.
This move is part of ASIC’s broader crackdown on financial practices that disproportionately affect vulnerable customers. It follows a previous round of refunds worth $33 million and highlights the regulator’s ongoing scrutiny of the nation’s biggest banks.
Refunds to Reach 770,000 Customers
ASIC confirmed that approximately 770,000 customers will receive refunds in this second round of payments. These customers, many of whom rely on government concession payments, were wrongly charged higher fees across 21 financial institutions. The refunds cover fees dating back to mid-2019, reflecting systemic issues in how banks handled low-income accounts.
ASIC stated that this action builds on its earlier findings, which resulted in $33 million in refunds to 150,000 customers. The latest development demonstrates the regulator’s determination to ensure fairer treatment of customers who have historically faced limited financial flexibility.
ANZ and Westpac Lead the Compensation Effort
Among the country’s big four banks, ANZ is responsible for the largest share of the refunds. It is expected to pay $47.9 million to nearly 590,000 customers who were affected by excess fees. Westpac will pay $9.9 million in refunds to customers dating back to 2013, reinforcing the scale of the issue across multiple institutions.
These repayments reflect a significant financial commitment by the banks involved, but they also highlight years of fee mismanagement that went largely unchecked until ASIC’s intervention.
Commonwealth Bank Faces Criticism
Commonwealth Bank of Australia (CBA) has stated that it will not make any additional payments after previously refunding $25 million to around 90,000 Indigenous concession account holders. However, ASIC’s report revealed that CBA and its subsidiary Bankwest charged a total of $270 million in fees to low-income customers between July 2019 and October 2024.
Instead of issuing further refunds, CBA announced plans to transition 1.5 million high-fee accounts to a “new nominal fee” structure, pending regulatory approval. Bankwest has already eliminated fees from two of its high-fee accounts by converting them into low-fee products.
Nab Excluded from the Probe
National Australia Bank (NAB) was not part of ASIC’s investigation. It had eliminated dishonour, account-keeping, and overdraft fees on its transaction accounts in 2014, setting it apart from its competitors. ASIC emphasized that while NAB’s earlier reforms excluded it from the current round of enforcement, the regulator will continue monitoring the banking industry to ensure that all financial institutions provide accessible and fair their services.
While, ASIC’s enforcement action against Australia’s largest signals an increased focus on consumer protection. By targeting fee structures that have long disadvantaged low-income customers, the regulator is aiming to create a more equitable banking environment across the sector. The ongoing reforms, combined with the substantial refunds already paid, reflect a shift in how financial institutions are held accountable for their treatment of vulnerable customers.
