iscover
As outlined in the Better and beyond: Expanding better banking outcomes to more low-income Australians report, over 920,000 Aussie bank customers will pocket more than $93 million following the review.
The regulator collected data from 21 banks. More than 1 million customers were moved to low-fee accounts, saving $50 million in annual fees.
According to ASIC, over $33 million in fees has already been refunded to 150,000 customers, with an extra $60 million for 770,000 customers expected to be refunded.
Through the increased scrutiny, nine banks have removed barriers to accessing low-fee accounts, and seven have improved processes for moving customers to these 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 said that while identifying to reimburse these customers showed positive progress, there is far more work to be done.
He said it shouldn’t have taken this review to get the banks to refund customers and encouraged lenders to improve processes to ensure customers aren’t left financially vulnerable.
“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,” said Longo.
“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.”
Four of the banks targeted by ASIC have since committed to providing refunds for affected customers:
- ANZ has refunded over $1.8 million to over 9,320 customers for fees incurred between 1 July 2019 and 31 August 2024.
- Bendigo Bank has refunded over $1.12 million to 19,488 customers for fees incurred from July 2019.
- Westpac has refunded over $5 million to more than 27,000 customers for fees incurred from 1 July 2019.
- CBA (including Bankwest) has paid over $25 million to approximately 90,000 accounts for fees incurred from 1 July 2019.
ANZ, Westpac, and Bendigo Bank reportedly went above and beyond to service a larger portion of affected customers.
The report also encouraged banks to improve service for First Nations customers. Six banks have begun collecting data to identify and rectify issues.
Some individuals received payments of $5,200. This can be a lifeline for struggling families.
“A $1,200 refund was equivalent to one customer’s fortnightly Age Pension. A $2,600 refund equalled around 110 hours of minimum-wage earnings for another customer, and a $5,200 refund matched 13 weeks of another customer’s JobSeeker payment,” Longo said.
“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.”
