No more hidden fees: pensioners to shift to cheaper banking
ANZ is one of 20 banks the ruling applies to, and Australian Competition and Consumer Commission deputy commissioner Mick Keogh (inset). Pictures by Andrew Marshall/Rachael WebbThousands of pensioners and. . .
ANZ is one of 20 banks the ruling applies to, and Australian Competition and Consumer Commission deputy commissioner Mick Keogh (inset). Pictures by Andrew Marshall/Rachael WebbThousands of pensioners and concession card holders could automatically be shifted to cheaperbankaccounts under a landmark Australian Competition and Consumer Commission (ACCC) ruling designed to stopvulnerable customers paying unnecessary fees. Create afree accountto read this articleor signup to continue readingLow-income customers such as pensioners will now not only be notified about free account options but automatically be rolled into them on an opt-out basis, according to the ruling. National Seniors Australian chief executive Chris Grice described it as a "practical measure" that will place the "onus on banks" to identify eligible customers and move them into more suitable accounts. "For pensioners on fixed incomes, even relatively small savings on fees can make a meaningful difference to limited budgets, it all adds up," he said. "We encourage banks to implement and communicate these changes to customers, as quickly as possible, so those impacted are aware of, and can expect this little bit of good news. "What the ACCC ruling means for youThe ruling authorises banks to offer eligible new customers basic, low or no-fee accounts. Crucially, it also requires banks to proactively identify existing customers who may be eligible for lower-fee accounts and move them unless they choose to opt out. Up to 20 Australian banks including the big four banks, Westpac, Commonwealth, ANZ and NAB, will be impacted by the ruling which lasts for five years. Other conditions that are part of the ruling include that banks "at least once annually, take reasonable steps to identify and directly contact existing customers who may be eligible but are not already using these accounts". Banks will also be required not to charge interest on informal overdrafts on basic, low or no fee accounts, or refund any interest charged. ACCC deputy chair Mick Keogh said these conditions will help "more eligible Australians access lower-cost banking products and avoid bank fees that significantly impact people on lower incomes". "We want banks to do more than simply make these accounts available. They should actively identify customers who may benefit and make sure they are aware of their options," he said. Why has the ruling happened?The catalyst for the ruling was areview by ASIC in 2024which found more than 150,000 low-income and First Nations customers paid $6 million in avoidable fees over a year, largely through overdraw and dishonour fees, despite being eligible for a basic account. The banks targeted in the review have refunded customers, with the major banks refunding a total of $93 million to low-income customers who were found to have been charged excessive bank fees. Commonwealth Bank has been slower to pay back the money, initially arguing that fee-free accounts should only be offered to existing customers on an "opt in" basis. Commonwealth Bank CEO Matt Comyn. Picture suppliedPatricia Sparrow, chief executive of COTA Australia, toldThe Seniorthe change reflected common decency. "Knowingly leaving people on more expensive products when better options are available falls well short of that expectation," Sparrow said. "This important ACCC decision ensures the banks will need to act in their customers' interests rather than putting the onus on the individual. "More from MoneyTwice weeklyThe Senior newslettersStay in the know on news that matters to you with twice weekly newsletters from The Senior.