Major banks to refund millions in fees to low-income customers: Are you eligible?

Several of the country’s major banks have been ordered to refund over $28 million to customers after they were found to have overcharged low-income Aussies.

The refunds come after the Australian Securities and Investments Commission’s (ASIC) Better Banking for Indigenous Consumers report found that the ANZ, Bendigo and Adelaide Bank, CBA and Westpac kept at least two million Australians on low incomes, including many who relied on Centrelink payments to make ends meet, in high-fee accounts.

Among those impacted by the high-fees include a disability support pensioner from regional New South Wales who was charged more than $2280 in dishonour fees in the space of one year, while a person on a Centrelink carer’s payment was charged $1772 in account-keeping fees.

ASIC Commissioner Alan Kirkland stated that the banks’ actions had led to financial distress due to unnecessary fees and complicated banking procedures, frequently creating obstacles for consumers in regional and remote areas.

“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,” 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.”

The findings from ASIC’s report has forced banks to commit to moving more than 200,000 people into low-fee accounts, saving these customers an estimated $10.7 million in future yearly savings.

Kirkland welcomed the steps the banks had taken but stressed that more needed 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,” Kirkland said.

“It highlights the impact the banking system can have on Australians. Fair banking services for all Australians, including those on low-incomes or located in regional or remote areas, are critical for our financial system.

“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.”

ASIC encourages all consumers to contact their bank to discuss what fees they are paying.

-with AAP.