ISCOVER
Banks will pay almost 1 million Australians over $93 million in refunds after a review into excessive fees charged on transaction accounts.
Banks guilty of charging excessive fees will refund more than $93 million to over 920,000 customers, following the Australian Securities and Investments Commission’s (ASIC) latest bank fee review.
The regulator’s Better and beyond: Expanding better banking outcomes to more low-income Australians report collected data from 21 banks and found an additional nine banks removed barriers to accessing low-fee accounts, while an additional seven banks improved processes for moving customers to low-fee accounts.
ASIC said that following the latest report, over 1 million customers had been moved into low-fee accounts, saving them an expected $50 million in future yearly fees.
The $93 million in refunds consists of over $33 million in fees already refunded to more than 150,000 customers and a further $60 million to be refunded nationwide to over 770,000 customers.
The latest research from ASIC explored banks’ responses to excessive fees charged on transaction accounts, affecting potentially millions of Australians. It followed a previous bank fee report (from July 2024) that found banks had kept at least 2 million low-income consumers in high-fee accounts despite them relying on Centrelink payments.
‘Clearly work to be done’
In its latest report, ASIC cast the net over more banks and found even larger numbers of low-income consumers paying too much.
The watchdog sought banks’ responses on how they were responding to recommendations outlined in the earlier report. This included how banks were reviewing transaction data to identify low-income customers and addressing fee harm for low-income customers in high-fee transaction accounts.
Three of the four banks (Australia and New Zealand Banking Group, Bendigo Bank, and Westpac) featured in ASIC’s initial report have committed to providing refunds of bank fees to a broader group of low-income customers who have been in high-fee accounts.
Commonwealth Bank of Australia (CBA) and Bankwest have indicated they do not intend to make payments to customers outside of the initial report’s cohort who incurred fees in high-fee transaction accounts, while eligible for a low-fee account.
A further seven banks have improved processes (including ANZ, Bendigo Bank, and Westpac), while an additional nine banks (including MyState Bank, Bank of Queensland, and Beyond Bank) have made it easier to access low-fee accounts. This included removing the requirement to attend a bank branch or show a Commonwealth Seniors Health Care Card, Health Care Card, or Pensioner Concession Card.
ASIC chair Joe Longo warned banks that more change was needed to rebuild trust.
“Despite the improvements banks have made during our surveillance, there is clearly work to be done,” he said.
“It should not take an ASIC review to force $93 million in refunds or make banks assess their processes to ensure the trust and expectations placed in them are justified.
“Banks need to truly hear the messages in this report – read it, review it, and 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.”
ASIC commissioner Alan Kirkland added: “What started as an initiative focused on addressing avoidable bank fees for low-income customers in regional and remote locations, particularly First Nations consumers, revealed a much wider problem affecting customers nationwide.”
The banking fees report comes as ASIC continues its work in managing compliance in the financial services sector.
Last week, ASIC opened a review into the debt management and credit repair sector following concerns that some may have failed consumers.
[Related: Banks to refund $28m to low-income customers]
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