ASIC Secures Over AU$93 Million in Low-Income Bank Fees Refunds

Technical Indicators

Australia’s financial regulator has taken a major step to protect vulnerable customers. The Australian Securities and Investments Commission (ASIC) confirmed that banks will refund over AU$93 million to low‑income account holders. This refund comes after a detailed review of bank fee practices uncovered charges that should not have been applied. We now see one of the largest consumer remediation efforts in recent years, targeting fees that hit people already struggling with tight budgets. In this article, we break down why these refunds are happening, how the money will be returned, and what it means for both banks and customers going forward.

Background of the Refund

ASIC published Report 811, Better and Beyond: Expanding Better Banking Outcomes to More Low-Income Australians, on July 29, 2025. The review included data from 21 banks, both major and regional institutions. The problem was widespread: banks held concession-holders, pensioners, and government-benefit recipients in high‑fee transaction accounts, despite rules preventing this. The review expanded on a 2024 investigation focused on First Nations and remote-area customers.

Reasons Behind Refunds

ASIC flagged that many customers remained in high‑fee accounts, incurring dishonour, overdraw, or account‑keeping charges even though they should have been automatically eligible for low‑fee accounts. Banks continued using “opt‑in” systems and often required concession card proof, even though they already held data showing eligibility. These administrative gaps resulted in unfair charges hard on people with tight budgets.

Refund Amount and Distribution

  • Total refunds: over AU$93 million.
  • Already repaid: over AU$33 million to more than 150,000 clients.
  • Pending refunds: about AU$60 million planned for around 770,000 more customers.
  • Total customers covered: over 920,000 people.

Refund payouts ranged from about AU$1,200 to AU$5,200 per person. For example:

  • A JobSeeker recipient in WA is set to receive more than AU$5,200, including AU$4,160 in dishonour fees from ANZ.
  • A single parent in Adelaide will get AU$2,645 from Westpac in overdraw fees.
  • A pensioner in Melbourne will receive AU$1,236 from Bendigo Bank.

Impact on Low‑Income Customers

These refunds offer meaningful relief for people with limited means. For someone on JobSeeker, an AU$5,200 refund equals more than three months of welfare payments. A AU$1,200 refund equates to around a fortnight’s age pension. A AU$2,600 refund is roughly 110 hours of minimum wage.

ASIC also confirmed that more than one million customers have been moved into low‑fee accounts. This transition is expected to save them around AU$50 million annually in future fees.

Bank Response and Corrective Measures

Various banks have especially ANZ, WestP, A, C, and Bendigo instituted a wide refund for low-income customers country-wide.

  • ANZ: AU$47.9million rebate to what was estimated to be 589,000 accounts.
  • Westpac will return about AU$9.9 million in refunds, covering nearly 148,000 customer accounts.
  • Bendigo Bank: refunds totalling AU$1.12 million for tens of thousands of customers.
  • Commonwealth Bank / Bankwest: AU$25 million paid to about 90,000 accounts. However, CBA declined to extend refunds beyond its initial cohort.

To avoid repeat issues, banks have begun:

  • Switching to opt‑out systems that automatically move eligible customers to low‑fee accounts.
  • Removing the need for branch visits or concession‑card proof to qualify.
  • Enhancing services for Indigenous and First Nations customers, including interpreter support and dedicated hotlines.

ASIC Chair Joe Longo emphasized that there should have been no need to take action through a refund to ensure that banks behave. He urged banks to review product designs, distribution processes, and proactively safeguard vulnerable customers.

ASIC’s Broader Enforcement Context

This AU$93 million remediation grows from earlier ASIC efforts, including the 2024 investigation into high‑fee accounts for First Nations and regional customers. That action led to initial refunds of about AU$28 million to around 200,000 customers, and annual savings of AU$10.7 million from switching accounts.

ASIC continues to monitor banking practices and has committed to enforcement if corrective steps are insufficient or delayed.

Broader Implications for the Banking Sector

The refunds and reforms are a financial hit for banks. ANZ alone will refund close to AU$48 million. But the reputational cost and risk of future regulatory penalties, possibly greater.
Banks are now under pressure to overhaul fee structures, streamline eligibility identification, and ensure fee transparency. This would aid in restoring trust and cutting down future remediation expenses

Conclusion

ASIC’s drive has secured over AU$93 million for low‑income customers wrongly placed in high‑fee accounts. More than 920,000 Australians will benefit. The refunds highlight systemic issues in how banks manage fee practices and treat vulnerable customers. ASIC’s ongoing oversight and enforcement focus aim to ensure such mistakes don’t recur, and that banks offer fair, transparent services aligned with customer needs.

Disclaimer:

This content is for informational purposes only and not financial advice. Always conduct your research.