Regulator Discovers Banks Overcharged 150,000 Low-Income Australians $6 Million in Fees
It is essential for our financial system to provide fair banking services for all Australians, particularly those with low incomes or living in regional or remote areas.
Following a review that discovered systematic overcharging of high fees to bank customers on low incomes, over $28 million will be refunded to them by four major Australian banks.
Commonwealth Bank, ANZ, Westpac, Bendigo, and Adelaide Bank were found to keep at least 2 million Australians on low incomes, including many reliant on Centrelink payments, in high-fee accounts.
The Australian Securities and Investments Commission (ASIC) report, released on July 15, used data from November 2021 to November 2022.
Customers eligible for low-fee accounts, such as those receiving government concession payments and Commonwealth Seniors Health Card, Health Care Card, or Pensioner Concession Card holders, were found to still be in high-fee accounts, resulting in significant erosion of their limited funds.
Over 150,000 low-income customers eligible for low-fee accounts were charged $6 million in fees over 12 months, primarily in overdraw and dishonour fees.
The report also revealed that switching from high-fee to low-fee accounts required customers to “opt-in,” disproportionately affecting consumers in regional and remote areas.
Consumers From Vulnerable Areas Hit With High Fees
A case study showed that low-income customers in Alice Springs were more likely to be charged fees compared to those in other postcodes, collectively being charged $205,280 in fees.
Despite being one of the most disadvantaged regions in Australia, with a low median family income, Alice Springs also has a significant Indigenous Australian population with limited banking access.
