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More than $ 93 million: Why refund banks with a low income
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More than $ 93 million: Why refund banks with a low income

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Banks that charge excessive costs to Australians with a low income are committed to repaying another $ 60 million to more than 770,000 customers throughout the country.
The obligation is part of a broader assessment of financial damage that is incurred by Dishonor, Overdraw and audit management costs on transaction accounts, released by the Australian Securities and Investments Commission (ASIC) on Tuesday.
After the last assessment, banks have now promised to pay more than $ 93 million in total reimbursements to more than 920,000 customers with a low income.
“Despite the improvements made by banks during our supervision, there is clear work to do,” said Asic chairman Joe Longo.

“It should not require ASIC evaluation to force $ 93 million to restitutions or have banks assess their processes to ensure that trust and expectations are justified.”

Last July, ASIC issued a report with excessive reimbursements that are charged through transaction accounts to customers with a low income and finding at least two million that were dependent on Centrelink payments were stored on high-fee accounts.

The report also included action taken by the four participating Banks-Anz, Bendendo Bank, Commonwealth Bank of Australia (CBA) and Westpac-including promises of $ 28 million in repayments and the migration of more than 200,000 customers with a low income from high to low accounts.

Bank practices ‘A much broader problem’

The latest report from ASIC pays out a broader net about the banking sector, whereby the products and processes are revised at 21 banks, including the same four banks as its previous report.
Among the other banks were AMP, Bank Australia, Macquarie, National Australia Bank and Suncorp Bank.
The well -to -do reactions were sought by the banks, including how they responded to recommendations from the earlier report from ASIC.

“What started as an initiative aimed at tackling avoidable banking costs for customers with a low income at regional and remote locations, in particular consumers of First Nations, revealed a much broader problem that affects customers nationally,” said Asic Commissioner Alan Kirkland.

What did the 2025 report think?

According to the latest report, the four banks have paid more than $ 33 million in reimbursements to the cohort of customers from the previous report – an increase of the $ 28 million that was promised.
The banks are also committed to more than $ 60 million in further reimbursements to more consumers with a low income.
This includes three of the four participating banks – Anz, Bendendo Bank and Westpac – which use around $ 57 million in further reimbursements for more than 730,000 customers. The approach of these banks was varied, including the types of accounts and reimbursements that are subject.
The Commonwealth Bank said that it would not repay $ 270 million in reimbursements and said that they were announced to customers at that time.

Seven extra banks that are committed to repaying $ 3.6 million, for an additional 45,000 customers.

When it comes to improving customer access to low-fee accounts, ASIC said that three of the participating banks had worked to migrate more than 815,000 customers with a low income from high to low accounts. This included Westpac, Anz and Bendigo Bank, while CBA intended to launch a new nominal cost account.
Seven extra banks had revised and improved their migration processes, while an extra nine had made it easier to gain access to low-fee accounts, ASIC said. This includes five banks that are the requirement to visit a bank branch to show a common -wealth seniors health care card, health care card of pensioner concession card.

Nine extra banks have also improved their internal processes to serve customers of First Nations, says the report. This included six banks that collected information about customers who identified themselves as Aboriginal and/or Torres Strait Islander to inform their services.

“Our intervention has forced many banks to take action, but more needs to be done to ensure that financially vulnerable consumers are not placed in this position again,” said Kirkland.

“We encourage consumers to challenge their banks to ensure that they are in the best account for their needs. What is even more important, we encourage banks to do more to proactively identify customers and move them to low accounts.”

How did banks respond?

An ANZ spokesperson said it has implemented a number of changes since last year since the first report from ASIC.
“As part of our further work, Anz has also made a deliberate decision to expand our remediation payments, which leads to a larger cohort of customers who have repaid costs and interest. This applies to a broad set of customers, not only customers of First Nations,” they said.
“Anz believes that an extensive approach to remediation is the right thing to do. We have already reimbursed thousands of customers and expect these payments to be completed by mid -2026.”

One of the changes to ANZ is also the automatic movement of customers who receive specific payments on an ANZ account to a low-fee account, unless they prefer, improvements in the opening process of the account for these customers and set up a special support line for First Nations customers.

A spokesperson for MKBA said that “the worries of ASIC acknowledge and the importance of honest and accessible banking for vulnerable and concession customers”.
They said that MKBA had paid more than $ 25 million to around 87,000 contact accounts of the first nations in “goodwill payments” – not as a remediation for contanations.
About $ 270 million in reimbursements charged for around 2.2 million customers with a low income between July 2019 and October 2024, to which reference was made, “customers were announced and were charged in accordance with their general terms and conditions,” said the spokesperson.
“The Concession Customer Group is a diverse cohort, including customers with different levels of income, savings and home ownership.
“Our approach focuses on supplying suitable options for this wide range of needs, so that sustainable, Full-service banking for all Australians in particular those in regional and remote communities. ”
The spokesperson said that plans to migrate customers to her new nominal account “are temporarily paused pending the consideration by the ACCC of the proposed new authorization for the Banking Code of Practice”.
SBS News also contacted Westpac and Bendendo Bank for comment.

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