4 Australian Banks To Refund AU$28 Million To Low-Income Customers After ASIC Probe

About 2 million low-income customers are set to receive a total of AU$28 million in refunds from four Australian banks after an Australian Securities & Investments Commission (ASIC) investigation revealed that the former were paying high fees despite being qualified for lower-cost accounts.

Refund requests poured in when the audit revealed that these clients were placed in high-fee accounts by ANZ, Commonwealth Bank of Australia, Bendigo and Adelaide Bank, and Westpac, even though they were eligible for low-fee accounts due to government payment support, Reuters reported.

The ASIC review found that due to the unlawful activity, the beneficiaries faced obstacles in receiving government funds, which entailed unnecessary charges.

ASIC requested the banks in July 2023 to improve their processes and pay low-income consumers back for the fees they had paid for high-fee accounts.

"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," ASIC Commissioner Alan Kirkland said.

Thanks to the switch to lower-fee accounts, over 200,000 Australians are now anticipated to save AU$10.7 million annually. With Commonwealth Bank introducing a special low-fee option for concession card holders and ANZ adopting automated transfers to low-fee accounts for qualifying clients, this trend is spreading even further.

Bendigo and Adelaide Bank "accepts there is more work to be done as we continue to take additional steps and find new ways to improve customer outcomes," a spokesperson said.

In response to criticism from ASIC, Commonwealth Bank is changing its strategy. Concession card holders, including Indigenous Australians, are the target audience for a new low-fee account.