CommBank reverses refusal to refund $68m in excessive fees for low-income earners
Commonwealth Bank will issue refunds to some customers who were incorrectly charged high bank fees. (ABC News: Keana Naughton)
In short:
CommBank has promised $68 million in refunds for incorrectly charged low-income earners on Centrelink payments.
The bank was put on notice by ASIC in July after a review found the bank had incorrectly charged customers a total of $270 million in fees.
What's next?
ASIC says while it welcomes the refunds, it is disappointed that some customers will miss out.
Commonwealth Bank has confirmed it will refund "relevant" low-income customers who were wrongfully charged excessive bank fees, five months after the national corporate regulator found it had incorrectly slugged customers $270 million.
The bank was put on notice by the Australian Securities and Investments Commission (ASIC) in July, after a review of 21 banks found customers had been unfairly charged high fees.
ASIC found low-income earners who were receiving Centrelink payments were being incorrectly charged excessive fees as a result of accrued account-keeping, dishonour and overdraw charges.
ASIC's Better and Beyond banking report saw $60m in refunds promised to customers. (ABC Kimberley: Esse Deves)
ANZ, Westpac and Bendigo Bank committed to almost $60 million in combined refunds, but Commonwealth Bank refused and withheld $270 million charged between July 2019 and October 2024.
The bank has now announced in a statement it has reversed its decision and will begin refunding "relevant concession customers who have incurred unusually high fees" a total of $68 million.
"We are fulfilling our commitment to make additional goodwill adjustments following ASIC's Better and Beyond Report," the statement read.
Commonwealth Bank said its promise would bring its total amount of "goodwill payments" to $93 million, which included $25 million returned to account holders identified in an earlier ASIC report into high bank fees for First Nations customers.
'A logical and ethical contradiction'
West Australian financial counsellor Alan Gray, who represents First Nations clients across the state's Kimberley region, said he was "astounded" by the announcement.
"For months, Commonwealth Bank has been publicly saying 'no, we've done nothing wrong and we shouldn't have to refund a cent of this $270 million,''" he said.
Alan Gray from Bush Money Mob has been campaigning for Kimberley residents due refunds. (ABC Kimberley: Esse Deves)
"All of a sudden, out of the blue, they decided that 'oh, we do actually have to refund this money'.
"Instead of refunding all of it, they're only refunding a quarter… it's just such a logical and ethical contradiction."
Mr Gray urged Commonwealth Bank to "do the right thing".
"They know there's a problem, they've admitted they should refund it," he said.
"It's just not good enough."
Welcome, but disappointed
ASIC commissioner Alan Kirkland said while he welcomed the change, it was "disappointing" many people charged excessive fees may not receive a cent.
"These are people on very low incomes," he said.
"Any money that comes out of their bank account by way of a fee, is money that they haven't been able to spend on basics like groceries or energy bills."
Alan Kirkland has welcomed CommBank's decision to refund customers $68 million. (ABC News: Julian Robins)
Mr Kirkland said the watchdog would continue to monitor the bank's commitment.
"It's always been our view that this shouldn't be an issue that we need to pursue through litigation or formal action,"he said.
"We expected banks to make it right."
CommBank to contact customers
While Commonwealth Bank said it would contact eligible customers, Mr Kirkland encouraged people to contact their bank.
Commonwealth Bank says it will begin issuing the payments in February. (ABC News: Nick Haggarty)
Mr Gray said customers should also reach out to a financial counsellor for advice.
"I really think people should be contacting their local financial counselling agency and not sitting back and waiting for the Commonwealth Bank," he said.
"I really doubt that they have it in their DNA to do the right thing."