Million Aussies get $93m fee refund: Is your bank on list?
Australian banks have promised to refund a mammoth $93 million in rogue fees to nearly one million customers. See the full list of banks and if you can expect a nice windfall.
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Australian banks are set to pay more than $93m to nearly one million customers after the corporate regulator found excessive fees were draining the accounts of low-income earners.
In a review of 21 banks, including the big four, the Australian Securities and Investments Commission found they had charged high fees on transaction accounts for customers who received government concession payments, according to a new report released today.
Some customers will receive refunds of up to $5,000 each.
Customers who receive concession or pension payments, - classified as low-income earners - are entitled to access low or no-fee accounts without high fees, according to the Banking Code of Practice.
But large numbers of these customers have had their limited funds “eroded” by remaining in high-fee transaction accounts which charged dishonour, overdraw and account keeping fees, ASIC’s report said.
Four banks have already refunded more than $33m to more than 150,000 customers, but a further $60m will be paid out to 770,00 customers after participating banks reviewed the impact of high-fee accounts on low-income customers.
ASIC chair Joe Longo said the banks needed to “ask themselves some difficult questions about what led to this situation”.
“We expect banks to regularly assess product design and distribution to ensure customers have the most appropriate products and that they are given the support they need.”
Previously, ASIC found the banks had processes for identifying low-income customers who were likely to be eligible for low-fee accounts, but they were mostly “opt-in” - requiring customers to take active steps to move from a high-fee to low-fee account.
Most banks also required customers to provide proof of a concession card in order to access a low-fee account, despite the fact they could identify the customers were receiving government concession payments.
Three out of four banks ASIC initially investigated last year have committed to refunding low-income customers nationwide: ANZ, Bendigo Bank and Westpac.
Meanwhile Commonwealth Bank and Bankwest have indicated they do not intend to make refunds to low-income customers outside a specific cohort - customers in regional and remote locations where there are significant Indigenous populations and customers who received ABSTUDY payments.
CBA (including Bankwest) data showed it charged about $270m in account-keeping, dishonour and overdraw fees to 2.2m low-income customers who weren’t in the cohort between July 2019 to October 2024.
However, CBA noted it served a higher volume of remote and regional customers than any other bank and its low-income customers benefited from informal overdraw facilities attached to its high-fee accounts, ASIC’s report said.
Some of the refunds which will be paid out included amounts ranging from $1,200 to $5,200, ASIC commissioner Alan Kirkland said.
These included a single parent from Adelaide who will be paid back $2,645 from overdraw fees from Westpac, while a pensioner in Melbourne will receive $1,236 charged from Bendigo Bank, for Bank@Post.
One JobSeeker recipient from WA will be refunded more than $5,200, including more than $4,160 in accrued dishonour fees from ANZ.
“It’s important to understand what those amounts mean for people struggling to make ends meet,” Mr Kirkland said.
“A $1,200 refund was equivalent to one customer’s fortnightly age pension.
“A $2,600 refund equalled around 110 hours of minimum-wage earnings for another customer and a $5,200 refund matched 13 weeks of another customer’s JobSeeker payment.”
Multiple banks have made changes, including “opt-out” processes for migrating customers to low-fee accounts and expanding their eligibility criteria to customers who receive concession payments, rather than just customers who hold concession cards.
ASIC reported more than one million customers had already moved into low-fee accounts, expected to save about $50m in future yearly fees.
It also said a number of banks had removed barriers and improved their processes for moving customers to low-fee accounts.
Some had also acted to improve their services for Indigenous customers, including dedicated teams, customer service lines and use of interpreters, the report said.
Mr Kirkland added he encouraged customers to “challenge their banks to ensure they are in the best account for their needs”.
“More importantly, we encourage banks to do more to proactively identify low-income customers and move them to low-fee accounts.”
ASIC has suggested customers can seek further help from the National Debt Hotline or Mob Strong Debt Help, a free financial counselling service for Indigenous people.
The banks included in the review were:
AMP - intends to refund more than $33,955 to more than 530 customers for fees incurred from July 2019 (including interest).
ANZ - has refunded more than $1.8m to more than 9,320 customers for fees incurred between July 2019 and August 2024. It has committed to refunding about $47.9m to about 588,900 accounts.
Bank Australia - expects to refund over $42,170 to 1,532 customers by September 30
Bank of China - committed to refund fees charged to a small number of low-income customers since July 2019
Bank of Sydney - intends to refund more than $3,000 to 35 accounts.
Bendigo Bank - has refunded more than $1.12m to 19,488 customers for fees incurred from July 2019. It also refunded more than $155,000 to 600 additional low-income customers for fees charged from July 2023.
Beyond Bank - will commence opt-in migration for customers paying more than $5 in fees each month.
Bank of Queensland - refunded over $740,000 to about 9,274 customers for fees charged from July 2019.
Commonwealth Bank (including Bankwest) - has paid more than $25m to about 90,000 accounts for fees incurred from July 2019.
Great Southern Bank - committed to identify and move low-income customers to a low-fee account on an opt-out basis.
ING - has not charged dishonour, account-keeping or overdraw fees on transaction accounts since 2020.
Macquarie - ceased dishonour, account-keeping or overdraw fees on its transaction savings account in 2018.
MyState Bank - refunded over $27,500 to 760 accounts.
National Australia Bank - has not charged dishonour, account-keeping or overdraw fees since 2014.
Police Bank - committed to changes including a semi-annual opt-in campaign for low-income customers and broadening eligibility for its low-fee account to customers who receive government concession payments (without needing to show a concessions card).
Rabobank - refunded $782 to customers who held concession cards.
Summerland Bank - uses alternative identification processes and has added the honorifics “Uncle” and “Aunty” in its core banking system.
Suncorp Bank - committed to refunding over $2.8m to 33,496 customers.
Teachers Mutual Bank - offers only low-fee accounts or savings accounts.
The Traditional Credit Union - committed to reviewing the design and distribution of transaction accounts, including fees.
Westpac - has refunded more than $5m to more than 27,000 customers for fees incurred from July 2019. The bank has committed to refunding more than $9.9m to 148,000 low-income customers for fees charged from July 2023.
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Originally published as Million Aussies get $93m fee refund: Is your bank on list?
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