When it comes to saving money, banks are the go-to place for everyone to secure hard-earned cash.

With many banks to choose from, everyone has the right to save money and access reliable banking services.

In a recent turn of events, four of Australia's major banks could return nearly $30 million to their customers following a damning review.

A report by the Australian Securities and Investments Commission (ASIC) shed light on the practices of ANZ, Commonwealth Bank, Westpac, and the mid-tier Bendigo and Adelaide Bank.

The report, set to be released to the public, found that these institutions kept at least two million low-income customers in high-fee accounts.

The report also uncovered that these banks charged exorbitant fees to those reliant on Centrelink payments.

Over 200,000 customers should see changes in their accounts after the ASIC report. Image Credit: Shutterstock/Wara1982

The review was part of ASIC's broader initiative aimed at improving financial services for First Nations customers, including avoidable bank fees.

ASIC commissioner Alan Kirkland highlighted the importance of this project.

'We focused in this project on the banks who were most likely to have First Nations consumers on low incomes trapped in high-fee accounts,' Mr Kirkland shared.

In response to the findings, the said banks pledged to take corrective action.

The four banks committed to transitioning more than 200,000 customers into low-fee or no-fee accounts, which could help banks save around $10.7 million annually.

Additionally, the banks would refund over $28 million in fees to affected customers within the next 12 to 18 months.

This initiative could cover about $24.6 million for Aboriginal and Torres Strait Islander students and apprentices receiving ABSTUDY payments.

It would also cover customers living in areas with substantial First Nations populations.

The review also brought to light the cumbersome processes customers had to endure to switch to low-fee accounts, as some travelled hundreds of kilometres to their bank's nearest branch.

'At any time, ASIC, and the community, expects that the banks will treat their customers fairly,' Mr Kirkland added.

ASIC's report has made it clear that the implications of these findings are not limited to the four banks in question but extend to all banking institutions across Australia.

'We're expecting all of them to read the report and make improvements to their practices to stop other people being trapped in high-fee accounts that they can't afford,' Mr Kirkland concluded.

This news may come as a shock, but it also serves as a reminder to review your bank accounts.

For low-income bank users or those receiving Centrelink payments under these banks, it's worth contacting your bank to see if you're eligible for a low-fee account.

If you have any concerns or questions about your banking arrangements, feel free to reach out to your bank or seek independent financial advice.

Key Takeaways

• Four major Australian banks could refund nearly $30 million to low-income customers following an ASIC review.
• ANZ, Commonwealth Bank, Westpac, and Bendigo and Adelaide Bank kept two million low-income customers—including many dependent on Centrelink payments—in high-fee accounts.
• Over 200,000 customers will be moved to low-fee accounts, saving them approximately $10.7 million a year.
• The banks will also refund over $28 million in fees to affected customers over the next 12 to 18 months, with a focus on First Nations communities.

What do you think of this ASIC report? Share your thoughts and opinions with us in the comments below.

 

[mylittletibbies]

LOL...have a valium and go lay down - you sound like a banshee!

Years ago my husband and I were offered to go to indigenous communities here in WA to do repair work to houses there as they are deplorable.
These houses were not deplorable when they were provided
We were basically told we could charge what we liked and would have ongoing work forever, if we liked, as they would soon need repairing again and again.
I don't know what the answer to this situation is, but it appears good money is just being thrown after bad, in a never ending cycle.
We declined.

 

[June E]

GIVE ALBO -- THE ELBOW

I agree but who will do any better ? We haven’t had good Gov for years !

 

[Isis]

If banks are supposed to check their customers are on the best low fee account for them, then electricity companies should also advise their customers of the best tariff etc to be on. Particularly if you get solar installed.

My AGL does this , my last bill said I might do better on a different plan. I contacted them and have saved a bit more.

 

[Steve gelencser]

My name is Steve I am on disability pension and the a.n.z. bank have been taking fees from my bank account for years not monthly fees but every fortnight $5 to $9 and l am fed up with this.

 

[Jest]

no need for fees with a savings account. My bank do not. BOQ

 

[Jest]

My name is Steve I am on disability pension and the a.n.z. bank have been taking fees from my bank account for years not monthly fees but every fortnight $5 to $9 and l am fed up with this.

change your bank to one that does not charge fees and there are plenty.

 

[mylittletibbies]

no need for fees with a savings account. My bank do not. BOQ

Mine either, Beyond Bank

 

[Jest]

"Which Bank" has sneakily increased their Master Card annual fee?. It was $30 a year. Now it's $3 per month!. That's only $6 a year more, but if everyone is paying that it will add to the banks profits. Also they offered me a no fee savings account, but with no interest. No way.

ME do not charge fees to us the BOQ do not charge fees to me

 

[Pamm Whittaker]

Are there no non first nations people in a similar situation?

I agree. My husband and I live in a regional mining town, and if people reported all the crime here by "First Nation people", the place would be a lot safer. I am not prejudiced, I just see things as they are.

I am on disability from the US, my husband is on the Carers Payment, as he is my full-time carer. We would be in trouble financially if his parents didn't have us living with them. Just my father-in-law now, as my mother-in-law refused to take insulin when she "felt fine". Her left leg was so infected that she now lives in a care home, and will never live at home again, unless Dad moves us to Perth when he retires.

 

[Jest]

Years ago my husband and I were offered to go to indigenous communities here in WA to do repair work to houses there as they are deplorable.
These houses were not deplorable when they were provided
We were basically told we could charge what we liked and would have ongoing work forever, if we liked, as they would soon need repairing again and again.
I don't know what the answer to this situation is, but it appears good money is just being thrown after bad, in a never ending cycle.
We declined.

some just do not have the capacity of learning, rest my case. three guesses.

 

[mylittletibbies]

I agree. My husband and I live in a regional mining town, and if people reported all the crime here by "First Nation people", the place would be a lot safer. I am not prejudiced, I just see things as they are.

I am on disability from the US, my husband is on the Carers Payment, as he is my full-time carer. We would be in trouble financially if his parents didn't have us living with them. Just my father-in-law now, as my mother-in-law refused to take insulin when she "felt fine". Her left leg was so infected that she now lives in a care home, and will never live at home again, unless Dad moves us to Perth when he retires.

I lived in Kalgoorlie and Geraldton in past years
Left both because of these problems .
I live in a small country town now where the large percentage of our indigenous population are not a problem at all. But, when there is a funeral, that's when the trouble starts. Out of towners come, break and enters start, usually by young children and early teens, because the parents know nothing will happen to them.

Elders from our local community have come to local meetings and discussed these problems trying to find a solution, but what is it.
Make the parents take responsibility?How?
They eventually leave, until the next time .
People, who really have no idea, cry discrimination, but, as you say, you're just saying it how it is.
Maybe some of our citycentric naysayers should try living with these problems and come up with a solution.

 

[JimmyFlatrock]

Isn't this bias?

That's a fair question given the way the article is written up.

I doubt very much it's bias or a racism agenda by the Security Commission at play, for a few reasons that may answer your question.

Remember the article is only referencing fee accounts being made fee free, rather than broader issues.

Point 1. I can recall that almost a year ago (maybe not that long) I had an account that was being charged a fee every month and all of a sudden I had the fees repaid to me and the account was made fee free. So maybe this is just catch up footie for remote area persons. I think the ASIC fee fairness agenda has been in place for a while for everyone and this is just the next step and it involves First Nations people,

Point 2. I think this clue in the article suggest this is just a part, not a whole of the Security Commissions initiatives. Depends how you want to read it. To me it suggests it is this part of the broader initiative that involves First Nations people.
"The review was part of ASIC's broader initiative aimed at improving financial services for First Nations customers, including avoidable bank fees."

Point 3. I think this part of the article suggests this is an additional item separate to the main aim of ASIC.
"This initiative could cover about $24.6 million for Aboriginal and Torres Strait Islander students and apprentices receiving ABSTUDY payments."

Point 4. This is definitely a broad based statement encircling all Australians.
"For low-income bank users or those receiving Centrelink payments under these banks, it's worth contacting your bank to see if you're eligible for a low-fee account."

Finally, ASIC's role as an independent commission of the government, is to regulate company and financial services and enforce laws to protect Australian consumers, investors, and creditors. It is bound by the laws and regulations of Australia, which prohibit discrimination on the basis of race.
On that basis alone, I can't see Commission people acting with bias or racism.

Hope this helps with your question.

 

[JimmyFlatrock]

This all happened when both governments were in power and has been going for decades this is why people should understand the banking rules because the banks are useless and they won't tell you, I haven't paid fees since I was 55

Agree, and also why ASIC was commissioned in part to regulate company and financial services and enforce laws to protect Australian consumers. That's why stuff in the article is happening and banks brought to heel. So that less savvy people are protected.

 

[densay]

Isn't this discrimination ???

 

[Knell]

Firstly - This story was about:- “Of the $28M - $24.6M is owed to predominantly First Nations people receiving ABSTUDY payments”. What don’t you understand about that and why they are starting there first? Just an opportunity to gratuitously make nasty comments it seems to me. They (the banks) have taken advantage of the people who do not understand how the banking system works.

(I am not trying to be rude or offensive, merely responding with my thoughts, in my way). Your comment shows ignorance - as ignorant as expecting someone with a mental disability to act (what many call) “normal”! I spent some time visiting Alice some 50 years ago… the same thing there back then with housing. It caused me to do some research on our Australian history (but I am no expert) - reading excerpts of British Royal Marine diaries and official government docs, as they were quite good at documenting things, in order to gain some understanding of the cause and effect. I understand the point that we as individuals did not directly do this. However, I accept that we as a society should take responsibility for assisting the rehabilitation. Yes, we keep getting it wrong, for one reason or another, but I support the continued efforts. You may only see the bad, but I see many successful outcomes, but there is more to do, and it does not happen overnight - it will be generational and with help and understanding. I have typed up many victim impact statements - primarily from victims in remote areas. One little girl - from the age of THREE (3), will forever wear a colostomy bag…one of many, many unbelievably sad and traumatic events. The expectation that past trauma and upheaval can be reversed conveniently by a click of the fingers or any amount of $s is foolish. Yes, we need to earn trust and give respect - and stop the racist attitudes - no good will ever come from it. I hear you say “reverse racism” - convenient but no…we most certainly introduced racism along with alcohol, drugs, disregard for dignity and control, etc. This is a short explanation of why I object when I hear blatant hate…hell, I come from a long line of white, fair-headed, blue-eyed European ancestry and I hear white superiority with every breath many take while articulating their comments - whether they realise it or not, it is ingrained. I grew up in a suburb where there were many indigenous families living in small houses, and they sure knew they were not welcome - especially when the owners of said houses burnt them down in order to move them on. I have no sympathy for the people who choose to live in areas which are predominantly indigenous and the rightful custodians of said areas - perhaps it is just their land. I do not expect to change your or anyone's minds here - only with the upcoming generations I hold any hope. P.S. Many suburbs around where generations of white dysfunction, drug and alcohol abuse, lack of education, criminal behaviour, etc. - our generations offspring - I would take a guess and say more in terms of numbers are represented…even though we are the perfect generation and got it all right- all paragons of virtue here!…JUST KIDDING, - I hear more white trash talking here than I have ever heard out in the real world!.

 

[Luckyus]

White supremacy ended when jack Johnson took the title?

 

[Knell]

White supremacy ended when jack Johnson took the title?

Boxing?

 

[Luckyus]

Boxing?

Doesn't matter it was so-called white sumpremacy

 

[Tervueren]

ASIC are so incapable of doing their job effectively I would not believe that they could organise a fight in a Pub! It was ASIC who 'overlooked' Institutions charging dead people, ASIC who did not protect Bank Customers- allowing CBA Financial Advisers to recommend products that gave them financial kickbacks or free holidays to unsuspecting Superannuation customers NOT putting their benefits first and sending hundreds broke or left with no Superannuation to live on! ASIC are still not doing their job competently and this oversight is just another example of their corruption and ineffectiveness.

 

[JimmyFlatrock]

another example of their corruption and ineffectiveness.

Not sure how directing Financial institutions to fix up fees charged on accounts that low income earners have is corruption on the part of ASIC.

As regards the separate matter you mentioned, I totally agree that financial advisors from the CBA were found to have acted against the best interests of their clients. This was all brought out formally in a senate inquiry that they had neglected their duties and put their own personal interests first.

However, it’s important to note that ASIC’s role is to regulate and enforce laws to protect consumers, investors, and creditors. They can only act when they become aware of misconduct. In this case, ASIC did take action once the misconduct was brought to their attention.

ASIC brought proceedings against the Commonwealth Bank and Colonial First State alleging breaches of conflicted remuneration laws. However, the Federal Court dismissed these proceedings, finding that Colonial did not breach the law when it agreed to pay the CBA to distribute Essential Super. The court found that the payments made by Colonial to CBA did not constitute benefits within the definition of ‘conflicted remuneration’.

Despite this, six of Australia’s largest banking and financial services institutions, including the CBA, have paid or offered a total of $3.15 billion in compensation, as at 31 December 2021, to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice.

I guess it's a moot point as to whether ASIC handled the court proceedings well or not. The Banks were probably flush with a lot more money to pay high end lawyers than a low budget Independent Commission set up by the government. However the exposure that ASIC brought with the court action seems to have pushed the banks to cough up some sizable compensations. Effective or not, I can't answer that one without more understanding of what precisely happened.

My further research tells me it’s also worth noting that ASIC investigations into the conduct of several other advisors at CFPL are ongoing, which gives me the impression that the Commission do hang in there where protection of consumers is needed.

So who do we blame. I would put it that the banks are for doing the dirty in the first place. Personally I have never agreed with the bonus carrot dangled in front of workers that ultimately leads them to put clients interests behind their own.

Maybe the government is partially to blame for not funding the Commission adequately.