(Reuters) – Four Australian banks will refund a combined A$28 million (U.S. $18.95 million) to low-income customers after an investigation by the corporate regulator found they were kept in bank accounts that charged high fees when they were eligible for cheaper products.
A report released on Monday by the Australian Securities and Investments Commission (ASIC) found that ANZ Bank, Commonwealth Bank of Australia, Bendigo and Adelaide Bank and Westpac held accounts that charged high fees to at least two million customers.
In July 2023, ASIC wrote to banks urging them to improve their processes and refund past fees incurred by low-income customers on high-fee bank accounts.
“Banks knew that many of their low-income customers were opening accounts in inappropriate high-fee accounts. It took ASIC’s intervention to force the banks to act,” ASIC chairman Alan Kirkland said.
Under Australia’s banking code, customers who receive certain government payments can open accounts with low fees, but the report said many of them end up staying in accounts with high fees, preventing them from saving.
“We acknowledge there is more to do as we continue to take additional steps and find new ways to improve outcomes for our customers,” a Bendigo and Adelaide Bank spokesman said.
The report also said that as a result of the review, the bank moved more than 200,000 customers into lower-fee accounts, saving them about A$10.7 million a year in future.
“CBA will open new low fee accounts with a small monthly fee to eligible specialised customers, including Indigenous specialised customers,” a spokesman for the country’s largest bank said.
ANZ and Westpac did not immediately respond to Reuters requests for comment.
(1 dollar = 1.4773 Australian dollars)
