ASIC Recommends Major Banks Pay Back Millions to First Nations Customers for Fee Damage

The recent findings by ASIC regarding the overcharging of low-income First Nations customers by major banks have sparked outrage and calls for action. It has been revealed that ANZ, Bendigo and Adelaide Bank, Commonwealth Bank, and Westpac have been keeping millions of people in high-fee accounts, resulting in excessive fees that have caused financial distress to those who could least afford it.

ASIC’s Better Banking for Indigenous Consumers report highlights the unfair practices of these banks, including difficult opt-in processes for switching to low-fee accounts and charging steep dishonour and overdraw fees. Despite being able to identify customers receiving government payments, the banks failed to move them to more suitable accounts, leading to avoidable fees and complicated processes.

The crackdown on fee harm has led to the refunding of over $28 million to affected customers and the commitment to move more than 200,000 people into low-fee accounts, saving them an estimated $10.7 million annually. This intervention by ASIC has forced the banks to take action and rectify their wrongdoings.

One of the most shocking examples of fee harm was an ANZ customer who was charged $3606 in dishonour fees, highlighting the extent of the problem. Additionally, low-income earners in disadvantaged areas like Alice Springs were found to be more likely to be ripped off by the banks, with thousands of customers collectively charged excessive fees.

It is clear that changes need to be made to ensure fair treatment of all customers, especially those on low incomes. ASIC commissioner Alan Kirkland has called on all banks to improve the accessibility of low-fee accounts and commit to providing adequate resources for First Nations services. Moving forward, banks must change their processes to automatically switch customers to low-fee accounts without the need for in-person visits, making banking more accessible and fair for all.