The refunds in the second round will be paid to low-income customers of 21 financial institutions receiving government concession payments, who were placed in higher-fee bank accounts despite a lower fee option being available to them, according to news.com.au. The latest development follows $33m in fees already refunded to 150,000 customers, which were previously paid out.
ASIC report had names of major banks
The report from the ASIC carried the names of three of the major banks that have now agreed to provide refunds of bank fees to a broader group of low-income customers who have been in high-fee accounts. The list contains names of several banks, including ANZ, National Australia Bank, Commonwealth Bank, Bendigo Bank, and Westpac Bank.
The report suggests that ANZ will pay out an estimated $47.9m to around 590,000 account holders for fees dating back to mid-2019, and Westpac $9.9m for fees incurred since 2013. National Australia Bank was not included in the probe, as it stopped charging dishonour, account-keeping, or overdraw fees on transaction accounts in 2014.
CBA says it won’t pay ‘$270m bill’
Commonwealth Bank has said that it is not paying any more after previously announcing a $25m payment to around 87,000 Indigenous concession customer accounts, news.com.au reported.ASIC has said that CBA and its subsidiary Bankwest provided data that claimed that it charged $270m in fees to low-income customers between July 2019 and October 2024. Instead, CBA plans to transition its 1.5 million eligible high-fee accounts held by low-income customers to a new “nominal fee,” which is still awaiting approval. Meanwhile, Bankwest removed fees from its high-fee accounts and converted two products to low-fee accounts.“CBA noted that it provides services to a high volume of remote and regional customers on a much larger scale than any other financial institution. CBA considers that low-income customers benefit from informal overdraw facilities attached to its high-fee accounts, on the basis that these facilities provide customers with financial autonomy and flexibility,” according to ASIC.
CBA acknowledges ASIC’s concerns
Speaking to NewsWire, a CBA spokesperson said that the bank acknowledges ASIC’s concerns and the importance of fair and accessible banking for vulnerable and concession customers. “The $270 million in fees (incurred between 2019 and 2024) ASIC references were disclosed to customers and were charged in accordance with their terms and conditions,” a CBA spokesperson said.
“The concession customer group is a diverse cohort, including customers with varying levels of income, savings, and home ownership.” In addition, CBA says they have paid over $25m in “goodwill” payments to approximately 87,000 Indigenous concession customer accounts, as identified by CBA in response to ASIC’s Better Banking for Indigenous Consumers Project. “These payments were made on a goodwill basis, not as remediation for any contraventions,” the spokesperson said.
CBA also says it is removing dishonour and overdraw fees and creating an informal overdraft facility with no overdraw fee, providing flexibility and reducing the need for higher-cost alternatives like payday loans. It will also have a nominal $1 monthly fee to support universal services such as branches and ATMs, telling NewsWire it is the only bank maintaining the scale and reach of full-service banking across Australia.
“We plan to migrate eligible concession customers from Smart Access and Complete Access accounts on an opt-out basis to the Essentials Account, the CBA spokesperson continued. “This migration is temporarily paused pending the consideration by the ACCC of the proposed new authorisation for the Banking Code of Practice.”
ASIC responds
Speaking about the report, ASIC chair Joe Longo said that despite the improvements banks have made during our surveillance, there is 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, as quoted by news.com.au.
“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, ” he added.
