(Reuters) – Four Australian banks will return a total of A$28 million ($18.95 million) to low-income customers after a review by the corporate regulator found they were kept in high-fee accounts despite being eligible for cheaper products.
ANZ, Commonwealth Bank of Australia, Bendigo Bank, Adelaide Bank and Westpac held at least 2 million customers in accounts that charged them high fees, a report by the Australian Securities and Investments Commission said on Monday.
In July 2023, ASIC wrote to banks asking them to improve their processes and recover past fees incurred by low-income customers on high-fee bank accounts.
“The banks knew that many of these low-income customers were in unsuitable accounts with high fees, and it would have taken ASIC to get them to act,” said ASIC Commissioner Alan Kirkland.
Customers who receive certain government payments are able to operate low-fee accounts under the Australian Banking Code of Practice. The report found that many of these customers remained in high-fee accounts, hampering their savings.
“The bank recognises there is more work to be done as we continue to take additional steps and find new ways to improve customer outcomes,” a Bendigo and Adelaide Bank spokesperson said.
The report also stated that following the review, banks moved more than 200,000 customers to lower-fee accounts, saving those customers around A$10.7 million in future savings on an annual basis.
“The Commonwealth Bank of Australia will create a new low-fee account with a nominal monthly fee for eligible franchise customers including original franchise customers,” a spokesperson for the country’s largest bank said.
ANZ and Westpac did not immediately respond to Reuters requests for comment.
(1 USD = 1.4773 AUD)