A man walks past a branch of the Australia and New Zealand Banking Group Ltd (ANZ).
Credit: Reuters photo
Four Australian banks will give back a total of A$28 million ($18.95 million) to low-income customers, after a review by the corporate regulator found these customers had been kept in high-fee bank accounts despite being eligible for cheaper products.
A report released by the Australian Securities and Investments Commission (ASIC) on Monday said ANZ, Commonwealth Bank Of Australia, Bendigo and Adelaide Bank and Westpac had kept at least two million customers in accounts under which they charged high fees.
ASIC had in July 2023, wrote to the banks asking them to improve their processes and refund past fees incurred by low-income customers in high-fee bank accounts.
"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," said ASIC Commissioner Alan Kirkland.
Customers who receive certain government payments can operate low-fee accounts under Australia's banking code of practice. The report found that many of these customers have remained in high-fee accounts, thereby hampering their savings.
The report also mentioned that following the review, the banks have migrated over 200,000 customers into low-fee accounts, thereby saving these customers about A$10.7 million in future savings on a year basis.
ANZ, Bendigo and Adelaide, CBA and Westpac did not immediately respond to a request for comment.