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.

 

[Tervueren]

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.

Jimmy thank you so much for enlightening me! I was under the impression that it was ASIC's job to keep the Banks and Financial Institutions under control and help to protect customers and to maintain the law. You have far more knowledge about this than I do so thank you for correcting me. I do agree that the Government has underfunded ASIC for many years and this could be part of the problem.

 

[JimmyFlatrock]

Jimmy thank you so much for enlightening me! I was under the impression that it was ASIC's job to keep the Banks and Financial Institutions under control and help to protect customers and to maintain the law. You have far more knowledge about this than I do so thank you for correcting me. I do agree that the Government has underfunded ASIC for many years and this could be part of the problem.

Thank you Tervueren for giving me an opportunity to witness a lesson in graciousness. Difficult, even nigh on impossible for some to do what you have obviously mastered. Cheers Jimmy

 

[Phantom55]

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.

definitely agree...considering a lot of these companies are NOT elect suppliers, but BILLING AGENCIES which in itself is a inflationary addition . Why cant an electricity co collect their own accounts, the customer is now paying a non electricity co to collect the money, to do this the customer is now paying the overheads of the collection co which is double handling duplicating office, staff,mngment,work cover accounting etc. These costs are already being included with the original elect provider in producing the electricity

 

[Lisa]

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.

I disagree when it clearly states first nations people, most of the money WILL be going to them, it DOES NOT include all Australians, the initiative was aimed at improving FIRST NATIONS people that in itself DOES NOT INCLUDE ALL AUSTRALIANS but a certain minority only, you emphasise the could cover 24.6 million to cover FIRST NATIONS approx 934,000 of them and that leaves 3.6 million for the rest of Australians 26.6 million of them...that hardly seem like a fair accountability, although not all are low income pretty sure there are quite a few.

 

[JimmyFlatrock]

Lisa, yes, I understand what you have said and why. And you are correct considering the way the article is written.

I said before that because I have had my old fee based account amended by my bank to a fee free account a while back, which strongly suggested to me that all low-income Australians would benefit from the ASIC initiative.

I have just now tracked down the media release, published on 15th July 2024.

I will copy some salient points from the release, but it does seem like it is the second report that pokes into what the banks have been doing to low-income Australians by keeping them virtually locked into a fee based account for no good reason.

It would seem that the report was done after ASIC became aware of how difficult the banks made it for customers to opt into a fee free account. That difficulty was exacerbated for those living in remote areas. This report is headlined 'Better banking for Indigenous Consumers' because most in remote areas are First Nations people, but it did include others as well. The bold emphasis is mine in all instances. Quotes from the media release are all in italics.

So in that sense you are correct as stated in the SDC article.
I wasn't totally wrong either as you may see in one of the below excerpts.

ASIC's Report 785 Better banking for Indigenous Consumers (REP 785) found that the ANZ, Bendigo and Adelaide Bank, CBA and Westpac kept at least two million Australians on low incomes, including many relying on Centrelink payments to make ends meet, in high-fee accounts.

ASIC Commissioner Alan Kirkland said the banks had caused financial distress through avoidable fees and complicated bank processes, often creating barriers for regional and remote consumers.

‘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,’ Commissioner Kirkland said.

‘Before our review, most banks only provided their customers with difficult 'opt-in' processes for switching to low-fee banking options, including forcing some consumers to travel hundreds of kilometres to their nearest bank branch.’

ASIC’s review was focussed on improving financial outcomes for First Nations consumers by addressing avoidable bank fees. The findings have resulted in broader outcomes for people on low incomes nationwide.

Following ASIC's review, the banks have migrated more than 200,000 customers into low-fee accounts, saving these customers an estimated $10.7 million in future yearly savings.

Me: So, yes, while the report/review was part of ASIC's broader initiative aimed at improving financial services for First Nations peoples, the findings have resulted in broader outcomes for people on low incomes across the entire country.

Whether ASIC first became aware of an unfair fee account issue via people living in remote areas with the tyranny of distance, complaining about it, thus sparking the review which then revealed issues for others, I don't know the answer to that, just that it's possible.

As for the dollars involved, I guess if you are not in a remote area and perhaps unaffected by distance, anyone could contact their bank, complain, and have the account changed to a fee free one. At the same time asking for a refund and quoting this ASIC report. I do believe the banks would respond in a positive way to a courteous request.

So ASIC has done some rough $ totals for the remote areas, as to what the banks might have to pay back, but have not worked out how much for the whole nation. Doesn't mean more won't be paid.

Hope this helps you get some answers Lisa.

 

[Knell]

Bias?...yes, a perfect example of INFORMATION BIAS!

 

[Lisa]

Doesn't matter it was so-called white sumpremacy

Please 1 learn to spell
2 understand that white supremacy did not start here!
You seriously need to check your facts!

 

[Lisa]

Lisa, yes, I understand what you have said and why. And you are correct considering the way the article is written.

I said before that because I have had my old fee based account amended by my bank to a fee free account a while back, which strongly suggested to me that all low-income Australians would benefit from the ASIC initiative.

I have just now tracked down the media release, published on 15th July 2024.

I will copy some salient points from the release, but it does seem like it is the second report that pokes into what the banks have been doing to low-income Australians by keeping them virtually locked into a fee based account for no good reason.

It would seem that the report was done after ASIC became aware of how difficult the banks made it for customers to opt into a fee free account. That difficulty was exacerbated for those living in remote areas. This report is headlined 'Better banking for Indigenous Consumers' because most in remote areas are First Nations people, but it did include others as well. The bold emphasis is mine in all instances. Quotes from the media release are all in italics.

So in that sense you are correct as stated in the SDC article.
I wasn't totally wrong either as you may see in one of the below excerpts.

ASIC's Report 785 Better banking for Indigenous Consumers (REP 785) found that the ANZ, Bendigo and Adelaide Bank, CBA and Westpac kept at least two million Australians on low incomes, including many relying on Centrelink payments to make ends meet, in high-fee accounts.

ASIC Commissioner Alan Kirkland said the banks had caused financial distress through avoidable fees and complicated bank processes, often creating barriers for regional and remote consumers.

‘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,’ Commissioner Kirkland said.

‘Before our review, most banks only provided their customers with difficult 'opt-in' processes for switching to low-fee banking options, including forcing some consumers to travel hundreds of kilometres to their nearest bank branch.’

ASIC’s review was focussed on improving financial outcomes for First Nations consumers by addressing avoidable bank fees. The findings have resulted in broader outcomes for people on low incomes nationwide.

Following ASIC's review, the banks have migrated more than 200,000 customers into low-fee accounts, saving these customers an estimated $10.7 million in future yearly savings.

Me: So, yes, while the report/review was part of ASIC's broader initiative aimed at improving financial services for First Nations peoples, the findings have resulted in broader outcomes for people on low incomes across the entire country.

Whether ASIC first became aware of an unfair fee account issue via people living in remote areas with the tyranny of distance, complaining about it, thus sparking the review which then revealed issues for others, I don't know the answer to that, just that it's possible.

As for the dollars involved, I guess if you are not in a remote area and perhaps unaffected by distance, anyone could contact their bank, complain, and have the account changed to a fee free one. At the same time asking for a refund and quoting this ASIC report. I do believe the banks would respond in a positive way to a courteous request.

So ASIC has done some rough $ totals for the remote areas, as to what the banks might have to pay back, but have not worked out how much for the whole nation. Doesn't mean more won't be paid.

Hope this helps you get some answers Lisa.

 

[Lisa]

I really didn't need answers thank you I am not the only that sees this as divisional, biased. As noted by replies here the whole point here is this is solely focussed on only one section of the community with the rest missing out...how is that fair and just??

 

[JimmyFlatrock]

I really didn't need answers thank you I am not the only that sees this as divisional, biased. As noted by replies here the whole point here is this is solely focussed on only one section of the community with the rest missing out...how is that fair and just??

No worries, the important thing is all have only seen the 'media's' interpretation of the report.

In addition the report was focussed on the remote areas because banks have made it far more difficult for those people than for others with easier access, so with that fact in mind, there is no bias or racism involved from ASICS pov.

But if you wish to judge that unfair and unjust things have happened, that's your prerogative. My own personal experience with unfair fee free accounts says that's not an accurate assessment of what has actually happened on the ground.

 

[Knell]

Lisa, yes, I understand what you have said and why. And you are correct considering the way the article is written.

I said before that because I have had my old fee based account amended by my bank to a fee free account a while back, which strongly suggested to me that all low-income Australians would benefit from the ASIC initiative.

I have just now tracked down the media release, published on 15th July 2024.

I will copy some salient points from the release, but it does seem like it is the second report that pokes into what the banks have been doing to low-income Australians by keeping them virtually locked into a fee based account for no good reason.

It would seem that the report was done after ASIC became aware of how difficult the banks made it for customers to opt into a fee free account. That difficulty was exacerbated for those living in remote areas. This report is headlined 'Better banking for Indigenous Consumers' because most in remote areas are First Nations people, but it did include others as well. The bold emphasis is mine in all instances. Quotes from the media release are all in italics.

So in that sense you are correct as stated in the SDC article.
I wasn't totally wrong either as you may see in one of the below excerpts.

ASIC's Report 785 Better banking for Indigenous Consumers (REP 785) found that the ANZ, Bendigo and Adelaide Bank, CBA and Westpac kept at least two million Australians on low incomes, including many relying on Centrelink payments to make ends meet, in high-fee accounts.

ASIC Commissioner Alan Kirkland said the banks had caused financial distress through avoidable fees and complicated bank processes, often creating barriers for regional and remote consumers.

‘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,’ Commissioner Kirkland said.

‘Before our review, most banks only provided their customers with difficult 'opt-in' processes for switching to low-fee banking options, including forcing some consumers to travel hundreds of kilometres to their nearest bank branch.’

ASIC’s review was focussed on improving financial outcomes for First Nations consumers by addressing avoidable bank fees. The findings have resulted in broader outcomes for people on low incomes nationwide.

Following ASIC's review, the banks have migrated more than 200,000 customers into low-fee accounts, saving these customers an estimated $10.7 million in future yearly savings.

Me: So, yes, while the report/review was part of ASIC's broader initiative aimed at improving financial services for First Nations peoples, the findings have resulted in broader outcomes for people on low incomes across the entire country.

Whether ASIC first became aware of an unfair fee account issue via people living in remote areas with the tyranny of distance, complaining about it, thus sparking the review which then revealed issues for others, I don't know the answer to that, just that it's possible.

As for the dollars involved, I guess if you are not in a remote area and perhaps unaffected by distance, anyone could contact their bank, complain, and have the account changed to a fee free one. At the same time asking for a refund and quoting this ASIC report. I do believe the banks would respond in a positive way to a courteous request.

So ASIC has done some rough $ totals for the remote areas, as to what the banks might have to pay back, but have not worked out how much for the whole nation. Doesn't mean more won't be paid.

Hope this helps you get some answers Lisa.

You have provided a very generous and thorough explanation, however I believe I have identified the real motive for the (mis)interpretations.

 

[JimmyFlatrock]

I am not the only that sees this as divisional, biased.

I agree, that exists, just not in this instance.
That type of bias on such a national scale is usually the thing that only politicians use. For eg: Housing Affordability policies that are biased against the young.

Or how about the divisional bias that exists with the banks practice with interest rates left uncontrolled. Meaning some countries have home loan rates that are not variable, that stay fixed. So if one were to buy a house when rates were low, that's how the rate stays. That seems fair to me.

A regional bias might exist in the one in question in this thread, but maybe that's a good thing to happened for remote region people.

So I doubt whether jumping on this divisional bandwagon is worthy of one's time.

 

[JimmyFlatrock]

You have provided a very generous and thorough explanation, however I believe I have identified the real motive for the (mis)interpretations.

Genuinely tricky sorting the wheat from the chaff in situations made unnecessarily complex.

 

[Knell]

Genuinely tricky sorting the wheat from the chaff in situations made unnecessarily complex.

Perhaps....depending upon which Bar you are drinking at.

 

[JimmyFlatrock]

Perhaps....depending upon which Bar you are drinking at.

That's a Sunday Too Far Away.

 

[JimmyFlatrock]

You have provided a very generous and thorough explanation,

Actually Knell, there's a large degree of self interest there as I sometimes use replies (and responses to such) as a means for myself to search out facts for my own benefit/knowledge base.

 

[Knell]

Actually Knell, there's a large degree of self interest there as I sometimes use replies (and responses to such) as a means for myself to search out facts for my own benefit/knowledge base.

For sure. I have found some things very challenging....some things, not so much.