Banks forced to take action on high-fee accounts
More than a million people have already been moved to low-fee accounts, saving an expected $50 million in annual fees, according the the Australian Securities and Investments Commission's (ASIC) Better and Beyond report released on Tuesday.
The review follows the Better Banking for Indigenous Consumers report, released in July 2024, which revealed at least two million low-income Australians, who relied on Centrelink payments, had bank accounts charging high fees.
There were 21 banks included in the latest report, which found even larger numbers of low-income Australians paying too much.
'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,' commissioner Alan Kirkland said.
Since July 2024, the four banks involved in the initial report- ANZ, Bendigo Bank, Westpac and the Commonwealth Bank (including Bankwest) have paid more than $33 million in refunds to the customers identified.
Three-of-those-four banks have committed to refunds to a broader group of low-income customers who have been in high-fee accounts.
The Commonwealth Bank and Bankwest have indicated they don't intend making payments to customers outside the initial cohort, ASIC's report said.
Several other banks have also reviewed the impact of high-fee accounts on low-income customers and have committed to remediation.
A further $60 million will be refunded to more than 770,000 customers as a result.
ASIC chairman Joe Longo said while banks had made improvements during the commission's surveillance, there was still work to be done.
'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,' he said.
'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.'
Nine banks had made it easier to access low-fee accounts, while another seven had improved processes for moving customers to those types of accounts.
Six more banks were now collecting data to identify First Nations customers, following a recommendations from the commission's initial review.
'Our intervention has forced many banks to take action, but more needs to be done to ensure financially vulnerable consumers are not put in this position again,' Mr Kirkland said.
'We encourage consumers to challenge their banks to ensure that they are in the best account for their needs.
'More importantly, we encourage banks to do more to proactively identify low- income customers and move them to low-fee accounts.'
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