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A report finds that the banks had kept at least two million customers in such accounts, hampering their savings
Four Australian banks will give back a total of A$28 million (S$25.5 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 (Jul 15) said ANZ, Commonwealth Bank Of Australia (CBA), Bendigo and Adelaide Bank, and Westpac had kept at least two million customers in accounts under which they charged high fees.
Asic had written to the banks in July 2023, 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,” Asic commissioner Alan Kirkland said.
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.
Bendigo and Adelaide Bank “accepts there is more work to be done as we continue to take additional steps and find new ways to improve customer outcomes”, a spokesperson said.
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The report also mentioned that following the review, the banks have migrated over 200,000 customers into low-fee accounts, giving these customers about A$10.7 million in future savings on a yearly basis.
“CBA will create a new low fee account with a nominal monthly fee for eligible concession customers including Indigenous concession customers,” a spokesperson for the country’s largest bank said.
An ANZ spokesperson acknowledged the report, saying the bank is implementing “specific changes”, including “setting up a process to move cohorts of eligible customers who receive relevant concession payments to a low-fee account on an opt-out basis”.
Westpac did not immediately respond to a Reuters request for comment. REUTERS
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