Australian banks are set to refund more than $93 million to low-income customers who were overcharged due to excessive banking fees. This follows a comprehensive review by the Australian Securities and Investments Commission (ASIC), which revealed that millions of Australians, particularly those dependent on Centrelink payments, had been charged unjustifiably high fees.
According to ASIC, more than 920,000 customers will benefit from these refunds. Over $33 million has already been returned to 150,000 customers, with an additional $60 million to be refunded to over 770,000 customers. The move is the result of increased scrutiny on the banking sector, which has led to significant changes in the way banks handle low-fee accounts.
Refund Process and Immediate Impact
The ASIC report, titled Better and Beyond: Expanding Better Banking Outcomes to More Low-Income Australians, outlined the findings of an extensive investigation into banking fees. Over 21 banks were reviewed, with many agreeing to make refunds and improve their processes.
As of now, four major banks, including ANZ, Bendigo Bank, Westpac, and Commonwealth Bank, have committed to returning fees charged since mid-2019. These refunds range from $1.8 million by ANZ to $25 million by CBA, with the latter covering over 90,000 affected accounts.
While this refund process brings immediate relief, the financial implications for those receiving reimbursements are significant. Some individuals have received refunds of up to $5,200, which has been described as a lifeline for families struggling to make ends meet.
ASIC Commissioner Alan Kirkland highlighted the importance of these refunds, noting that amounts like $2,600 are equivalent to a month’s worth of minimum-wage earnings, and $5,200 matches 13 weeks of JobSeeker payments.
Long-Term Changes and Banks’ Commitment
Beyond refunds, ASIC’s review has prompted long-term changes in the banking sector. Nine banks have now removed barriers to accessing low-fee accounts, making it easier for customers to switch to more affordable options. Seven banks have also improved the process of transferring customers to these accounts.
The ASIC report also calls on banks to enhance their services for First Nations customers, particularly in remote and regional areas. Six banks have begun collecting data to better serve these communities and address the specific challenges they face in accessing affordable banking services.
In response to the findings, ASIC Chair Joe Longo urged banks to take responsibility and regularly assess their products to ensure that customers are offered the most appropriate financial services. While the review has led to significant improvements, Longo stressed that further steps need to be taken to prevent financially vulnerable consumers from being exploited by unfair banking practices.
