Two of Australia's big banks Westpac and ANZ, as well as Bendigo Bank, will refund more fees to low-income customers in the wake of an ongoing investigation by the Australian Securities and Investments Commission (ASIC).
The latest refunds will add to $33 million the banks, along with Commonwealth Bank, have already repaid to welfare recipients living in remote and regional Australia where there are large First Nations communities.
CommBank repaid the lion's share of that amount - $25 million - but said it is not intending to refund around $270 million more it had charged other low-income customers over a five-year period to October 2024.
The latest ASIC report, released on Tuesday, noted Australia's largest bank and its subsidiary Bankwest do not intend to offer payments but rather switch customers to new nominal fee accounts.
ASIC still on the 'fee harm' case
ASIC's new report is a follow-up to one released in July 2024 that found the four banks it investigated - CommBank, Westpac, ANZ, and Bendigo and Adelaide Bank - caused "fee harm" to customers in remote communities where there were limited banking choices.
Its original report found customers could have avoided significant bank fees, including overdraw, dishonour and account-keeping fees, if there were low-fee accounts available through the participating banks.
The findings saw all four banks refund fees, but also prompted ASIC to widen the scope of its investigations to look at all welfare recipients with high-fee transaction accounts.
Its latest report has seen other banks also agreeing to refund low-income customers and improve their access to low-fee accounts.
3 of the 4 originals 'go beyond'
While acknowledging the banks in the original report had refunded affected customers, ASIC said ANZ, Bendigo, and Westpac had extended their actions by committing to refunding low-income customers nationwide.
They have also since migrated large numbers of low-income customers to low-fee accounts.
It gave examples of the scope of the payments for individual customers including one JobSeeker recipient who will be refunded more than $5,200 by ANZ which is equivalent to 13 weeks of JobSeeker payments.
But the report noted CBA (including Bankwest) said it provides services to remote and regional customers on a much larger scale than any other Australian financial institution.
It also considers low-income customers benefit from informal overdraw facilities attached to its high-fee accounts on the basis they provide customers with financial autonomy and flexibility.
CBA has told ASIC it has completed work on a new account product that will charge a nominal monthly account-keeping fee.
The new account will be distinct from the bank's existing low-fee accounts and will give CBA the discretion to permit overdraws without dishonour or overdraw fees, although it will charge interest on any overdrawn amount.
CBA has identified around 1.5 million high-fee accounts held by low-income customers that it intends to migrate to the new accounts, subject to authorisation by the Australian Consumer and Competition Commission.
Meantime, its wholly owned subsidiary Bankwest has removed fees from its high-fee accounts, converting two products to low-fee accounts.
CBA stand 'appalling'
The CommBank response has attracted widespread criticism from consumer and First Nations groups.
Senior financial counselling and strategy lead at Mob Strong Debt Help Bettina Cooper said it's "not great optics" for a bank making super profits.
"CBA knows it has unfairly pocketed $270 million in fees and seems comfortable keeping it while other banks have willingly returned it," she said.
"It is appalling that CBA is still avoiding transitioning people to an equitable low fee or no fee account without fee harm to low-income people, including First Nations people, of which a high number historically bank with them.
"Shame, CBA, shame."
Other banks to refund fees
The ASIC reported other banks had refunded, or agreed to refund, fees to identified customers in the wake of the initial report including:
- Suncorp Bank
- MyState Bank
- Bank of Queensland
- Bank Australia
- Rabobank
- AMP (pending)
- Bank of Sydney (pending)
- Bank of China (pending)
Some of the banks had identified only small numbers of customers affected.
Other Australian banks, including mutual banks, had also taken action to improve access to low-fee accounts.
The measures taken include removing the requirement to show concession cards to allow customers to keep low-fee accounts while some had removed dishonour and overdraw fees.
And a pat on the back to...
ASIC also named three banks that had not been included in its report or in follow-up work as they don't charge dishonour, overdraw, or account-keeping fees and offer all customers low-fee accounts.
These were:
- National Australia Bank which has not charged the fees since 2014
- Macquarie Bank which stopped such fees on transaction accounts in 2018
- ING which has not charged the fees since 2020
NAB took the opportunity to remind Australians its no-fee transaction account was the only zero-fee transaction account offered by a major bank in Australia.
NAB said more than seven million Australians hold the account, saving customers a combined $500 million in account fees since 2010.
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