ASIC report finds some banks kept low income customers in high-fee accounts

Nearly two million Aussies could soon receive hundreds of dollars after multiple major banks were ordered to issue more than $28m in refunds.

Nearly two million Aussies on low incomes could soon be seeing extra money in their bank accounts after multiple major banks were ordered to refund more than $28 million.

The directive comes after a Australian Securities and Investments Commission (ASIC) report revealed ANZ, Bendigo and Adelaide Bank, Commonwealth Bank of Australia and Westpac kept at least two million low-income Australians, including First Nations customers, in high-fee accounts.

Those customers, including many relying on welfare and ABSTUDY payments, were being systematically charged high fees, according to the Better Banking for Indigenous report released in July.

Some ANZ Bank customers will receive refunds. Picture: NewsWire / David Geraghty

Customers have reported seeing money owed to them starting to trickle into their accounts, with many taking to social media to share their surprise.

One CBA customer revealed he’d noticed $105 unexpectedly arrive in his account.

“I got this too. They paid me $777.64… I have no idea what’s going on,” another customer replied online.

“I just got paid $475.49? I’m also confused but happy lol (laugh out loud),” another replied.

The refunds come after ASIC Commissioner Alan Kirkland previously said the banks had caused financial distress through avoidable fees and complicated processes.

“Banks knew that many of these customers on low-incomes were in inappropriate high-fee accounts, and it has taken ASIC’s intervention to force them to act,” Mr Kirkland said.

“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.”

Mr Kirkland said more needs to be done to ensure the issue doesn’t happen again.

“This is the second report from ASIC in the last two months that highlights where banks have failed to put customers’ needs at the heart of their operations,” he said.

The ASIC report found some banks, including Commonwealth Bank, had been placing people on low income in high-fee accounts. Picture: NewsWire / Max Mason-Hubers

Mr Kirkland said the report highlighted the impact the banking system can have on household budgets.

“Fair banking services for all Australians, including those on low incomes or located in regional or remote areas, are critical for our financial system,” he said.

“Banks need to ensure they have systems and processes in place so customers on low incomes can easily transition to low-fee accounts, regardless of their location.

“We expect all banks – not just those we reviewed for this report – to consider these findings, improve the accessibility and distribution of low-fee accounts and commit adequate resourcing to specialist First Nations services.”

The banks listed in the report have since moved more than 200,000 customers into low-fee accounts.

It’s understood this action has saved customers an estimated $10.7 million in future yearly savings.

Originally published as ASIC report finds some banks kept low income customers in high-fee accounts