Big Banks to Refund Millions in Fees to Low-Income Customers Following ASIC Report

In a groundbreaking move, four major Australian banks have agreed to refund over $28 million in fees to low-income customers (including First Nations people) following an Australian Securities and Investments Commission (ASIC) report.

The report “Better banking for Indigenous Consumers (REP 785)” revealed systemic overcharging practices that disproportionately affected vulnerable populations.

Findings of ASIC’s Report: Big Banks

The ASIC review identified that 澳新银行 , Bendigo and Adelaide Bank , Commonwealth Bank and Westpac had been charging high fees to many Australians on low incomes (many of whom rely on Centrelink payments) which created significant financial distress, particularly for those in regional and remote areas where access to banking services is already limited.

ASIC Commissioner Alan Kirkland highlighted the banks’ failure to provide adequate and accessible options for low-fee accounts and emphasised that prior to the review banks only offered difficult ‘opt-in’ processes for switching to low-fee options, which sometimes required consumers to travel extensive distances to the nearest bank branch.

Impact on First Nations and Low-Income Consumers

The review that's part of ASIC’s Indigenous Outreach Program aimed to improve financial outcomes for First Nations consumers; however, these findings have broader implications for all low-income Australians.

As a result of the review:

• Over 200,000 customers have been migrated to low-fee accounts, collectively saving an estimated $10.7 million annually.
• $28 million in fees will be refunded over the next 12 to 18 months with $24.6 million specifically earmarked for customers receiving ABSTUDY payments and those in areas with significant First Nations populations.

While Commissioner Kirkland welcomed the banks’ remedial steps he stressed the need for further actions to prevent recurrence.

He also called for all banks (not just those reviewed) to consider the findings to improve access to low-fee accounts and commit to adequate resources for specialist First Nations services.

ASIC’s Intervention and Future Steps

ASIC’s intervention is the first of its kind under the Indigenous Financial Services Framework marking a significant step towards financial equity.

Key findings from the ASIC report:

• Over 150,000 customers on low incomes were in high-fee accounts despite being eligible for low-fee accounts.
• These customers were charged $6 million in fees they would not have incurred in low-fee accounts.
• Existing migration processes largely required customers to take active steps to move from high-fee to low-fee accounts with some migration rates as low as 0.5%.

Project Impact:

• Over $24.6 million in expected fee remediation to customers on low incomes.
• Over 9,200 customers in Indigenous pilot locations have been migrated to low-fee accounts.
• At least 6,350 ABSTUDY customers have been migrated to low-fee accounts.
• Banks have informed over 1.5 million customers of their eligibility for low-fee accounts and refunded over $4 million in fees to low-income customers.
• An anticipated yearly saving of $10.7 million in fees for over 200,000 customers who are now in low-fee accounts.

Consumers are advised to review their banking fees and consult free financial counselors through the National Debt Helpline or Mob Strong Debt Helpline for assistance.