Bank customers on low incomes, including First Nations customers, will receive more than $28 million in refunds after an ASIC review revealed systemic overcharging by four major Australian banks.
ASIC’s Report 785 found ANZ, Bendigo and Adelaide Bank, CBA, and Westpac charged high fees to low-income customers, including those relying on Centrelink payments.
“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 (pictured above) said.
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The review highlighted the barriers faced by low-income customers in switching to low-fee accounts.
“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,” Kirkland said.
Following the ASIC review, more than 200,000 customers have been migrated to low-fee accounts, saving them an estimated $10.7m annually.
Banks will refund more than $28m in fees, with $24.6m specifically for customers receiving ABSTUDY payments and those in areas with significant First Nations populations.
Kirkland commended the banks’ actions but stressed the need for ongoing improvements.
“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.
Kirkland urged all banks to enhance accessibility to low-fee accounts and commit resources to specialist First Nations services.
ASIC advises consumers to understand their fees and seek assistance from the National Debt Helpline or Mob Strong debt helpline for confidential financial counseling.
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For further information, consumers can contact their bank or financial counselor.
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