Yahoo Finance Major bank shock as $28 million refunds appear in Aussies' accounts: 'Confused but happy'
CBA, Westpac, ANZ and Bendigo and Adelaide Bank were found to have kept millions of Aussies on low incomes in high-fee accounts.
Millions of Aussies on low incomes will be refunded more than $28 million from the big banks, with some customers seeing payments hit their accounts this week. The refunds follow an investigation from the Australian Securities and Investments Commission (ASIC).
ASIC found Commonwealth Bank (CBA), Westpac, ANZ, and Bendigo and Adelaide Bank kept at least two million low-income Aussies in high-fee accounts. This included First Nations customers and many relying on Centrelink payments, the Better Banking for Indigenous Consumers report found in July.
A CBA spokesperson confirmed to Yahoo Finance that impacted customers were now receiving the “Better Banking Payment” refunds in their bank accounts.
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One CBA customer shared his surprise after seeing a $105 payment from the bank appear in his account.
“I got this too. They paid me $777.64 … I have no idea what’s going on,” another said.
“I just got paid $475.49? I'm also confused but happy lol,” a third added.
A Westpac spokesperson told Yahoo Finance the bank had refunded eligible customers and had taken a “proactive approach” to improve support for customers called out by ASIC’s report and those receiving ABSTUDY.
“We have refunded account keeping, debit interest and overdrawn fees dating back to July 2019 for all these customers’ transaction accounts, not just the account they receive their government payment,” the spokesperson said.
Westpac has also changed customers receiving government benefit payments over to a basic Concession bank account unless they opt-out.
Which customers are entitled to refunds?
CBA, Westpac, ANZ and Bendigo and Adelaide Bank all committed to refunding fees for eligible low-income customers identified in the report.
More than $28 million in fees will be returned to customers, with the vast majority - $24.6 million - to go to customers receiving ABSTUDY payments and those in areas with significant First Nations populations.
CBA committed to refunding $23 million in fees to around 87,000 customers with high-fee accounts following the findings. Refunds will cover fees incurred between July 2019 and August 2023 and will include debit interest, dishonour, overdraw and account-keeping fees.
Subsidiary Bankwest will refund around $350,000 to approximately 2,000 customers for fees incurred from July 2019 to March 2023.
Westpac already refunded more than $3.8 million in fees to more than 25,000 accounts and committed to refunding a further 600 accounts for fees incurred from July 2019 to July 2023.
ANZ committed to refunding impacted customers for account keeping, dishonour and direct debit fees incurred from November 1, 2021. It expects to return more than $350,000 in fees to more than 5,600 low-income customers.
Bendigo Bank committed to refunding overdraw, dishonour, Bank@Post and account-keeping fees for customers who migrate to a low-fee account. Refunds will cover fees charged from July 1, 2023 to the date of customer migration. Bendigo Bank expects approximately 16,900 customers will be refunded $664,000.
Banks told to do better
ASIC commissioner Alan Kirkland said banks had caused financial distress through the avoidable fees and complicated bank processes to switch to low-fee banking options.
“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,” Commissioner Kirkland said when releasing the report.
Following the review, banks have migrated more than 200,000 customers into low-fee accounts, saving customers an estimated $10.7 million in future yearly savings.
Kirkland welcomed the steps taken by banks but said more needed to be done to make sure it didn’t happen again.
“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,” he said.
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