Banks to refund $28 million to low-income customers after ASIC review
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The news: Four large banks will refund over $28 million to customers after an investigation by the corporate watchdog revealed that they kept low-income customers in high-fee accounts.
The context: ANZ, Bendigo Bank, Commonwealth Bank and Westpac were found to have kept at least two million customers on low incomes, many of whom are First Nations customers, in high-fee accounts.
The banks will return over $28 million in fees to customers over the next 12 to 18 months, including $24.6 million that will be paid to customers receiving ABSTUDY payments and those in areas with significant First Nations populations.
Following the Australian Securities and Investment Commission's (ASIC's) review, about 200,000 customers have been moved into low-fee accounts.
ASIC said the banks had addressed the regulator's recommendations to improve processes for migrating customers to low-fee accounts and the design and distribution (DDO) of products for people on low incomes.
What they said: "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," ASIC commissioner Kirkland said.
"Before our review, most banks only provided their customers with difficult 'opt-in' processes for switching to low-fee banking options, including forcing some consumers to travel hundreds of kilometres to their nearest bank branch."
The sources: ASIC media release, ASIC report
