Latest news with #Westpac
Yahoo
3 hours ago
- Business
- Yahoo
Major Aussie banks' $60 million cash boost for Centrelink recipients over excessive fees
Several major Australian banks have agreed to refund $60 million worth of fees that affected thousands of Centrelink recipients. A payout of more than $33 million was made to over 150,000 low-income First Nations customers last year. But the Australian Securities and Investments Commission's (ASIC) investigation found a further 770,000 customers had been affected by the issue after the regulator expanded the scope of its probe to 21 banks. Some of the latest culprits who will give back the money are ANZ, Westpac, and Bendigo Bank. The total agreed payout now stands at $93 million, with 920,000 low-income people receiving JobSeeker, the Age Pension, and Disability Support payments found to have been unfairly hit with dishonour, overdraw and account-keeping fees on transaction accounts. RELATED Major warning after Aussie receives random $350 payment in her bank account Rare 50 cent coin sells for $3,050 due to 'unique' reason Terrifying superannuation reality facing 4.3 million Australians Despite these customers qualifying for accounts that had minimal fees, they were kept in accounts that attracted high charges. ASIC chair Joe Longo said this result comes after months of scrutinising the banking system and hinted there could be further payouts to come."Despite the improvements banks have made during our surveillance, there is clearly work to be done," he said. "It should not take an ASIC review to force $93 million in refunds or make banks assess their processes to ensure the trust and expectations placed in them are justified." NAB was the only bank out of the Big Four left out of ASIC's investigation because it hasn't charged these fees in more than a decade. How much will the banks be paying out to low-income customers? ANZ, Bendigo Bank, and Westpac will make up the bulk of this payout by committing to $57 million worth of refunds to more than 730,000 people. They will also pay back interest that customers would have accrued had the money stayed in their account rather than being directed to paying off fees. Several other banks will also pay back $3.6 million to 45,000 customers. Customers have received huge cash boosts of several thousand dollars, which ASIC commissioner Alan Kirkland said would be life-changing for some low-income people. 'When you read in the report that refunds of $1,200, $2,600 and $5,200 were paid, it's important to understand what those amounts mean for people struggling to make ends meet,' he said. "What started as an initiative focused on addressing avoidable bank fees for low-income customers in regional and remote locations, particularly First Nations consumers, revealed a much wider problem affecting customers nationwide." ANZ, Bendigo Bank, and Westpac have now moved roughly 815,000 customers to accounts with lower fees, which will collectively save those affected $40 million per year. Seven other banks have reviewed and improved their systems, while an additional nine have made it easier for customers to access low-fee accounts. Commonwealth Bank holds out from $270 million cash boost Commonwealth Bank (CBA) won't be paying out the $270 million charged to 2.2 million low-income customers between mid-2019 and October 2024. The bank said those charges were disclosed to customers, who had to agree to those terms and conditions. Instead, Australia's biggest bank said it would move 1.5 million eligible people to a "new nominal fee account" that is yet to be fully approved. "That will address problems going forward for those people, but what it doesn't do is set things right for the fees they've been charged in the past," Kirkland said. "That is extremely disappointing." CBA said it had already made $25 million worth of "goodwill" repayments following ASIC's first report, but stressed this was not as remediation for any contraventions. What should customers do if they're hit with unfair fees? Kirkland insisted this fight against the banks wasn't over. He added that if something feels off with your bank or lender, it's worth speaking up. "We encourage consumers to challenge their banks to ensure that they are in the best account for their needs," he said. "More importantly, we encourage banks to do more to proactively identify low-income customers and move them to low-fee accounts. "Our intervention has forced many banks to take action, but more needs to be done to ensure financially vulnerable consumers are not put in this position again."
ABC News
3 hours ago
- Business
- ABC News
Thousands of Australians are set to receive bank refunds. Here's what to know
More than 800,000 banking customers are eligible for refunds totalling $60 million. It comes after a review of banks found customers had been unfairly charged high fees. Here's what to know about the refunds and whether you're eligible. The Australian Securities and Investments Commission (ASIC) last year revealed banks had knowingly kept at least 2 million customers in high-fee accounts despite them qualifying for cheaper products. The customers, who receive government concession payments, were found to have been unfairly charged dishonour, overdraw, assisted withdrawal and account-keeping fees. The report named ANZ, Bankwest, Bendigo Bank, Commonwealth Bank and Westpac as having overcharged customers. The latest ASIC report said some banks have agreed to provide compensation to more than 770,000 affected customers. They are: Commonwealth Bank and its subsidiary Bankwest have refused to refund the $270 million it had charged low-income customers. A spokesperson for the bank argued the fees "were disclosed to customers and were charged in accordance with their terms and conditions". The bank has previously made $25 million in "goodwill payments" to about 87,000 Indigenous concession customer accounts. "Where customers have incurred unusually high fees, we consider goodwill adjustments where appropriate while continuing to provide access to lower-fee options," the spokesperson said. Instead, the bank said it would move 1.5 million eligible customers to a "new nominal fee account" that is yet to be approved. ASIC commissioner Alan Kirkland said the commission currently isn't considering legal action against Commonwealth Bank. "This is an issue about doing the right thing by customers, and in particular, doing the right thing by customers on low incomes, who can least afford to be hit by high and unfair fees." Your bank will contact you in the coming months. Westpac said customers who are eligible can expect to receive a refund notification through their preferred communication method, which is "usually via letter and/or email". "If those contact details are unavailable, alternative methods such as SMS or phone calls may be used," a Westpac spokesperson said. If you're eligible for a refund, it will be deposited into your account automatically. The deposit will appear as a "refund" on your account statement. A spokesperson for Westpac said the bank expects to process most refunds by the end of this year.
Yahoo
4 hours ago
- Business
- Yahoo
Dark $95,420 property cloud looming for new buyers after RBA's interest cut silver lining
New research has revealed how much property prices spiked in the 12 months after the first interest rate cut from the Reserve Bank of Australia (RBA). Homeowners have already relished in two reductions in the cash rate this year, which has dropped from 4.35 per cent to 3.85 per cent. While a cut has put hundreds of dollars back into the pockets of mortgage-holders, those wanting to get into the property market may be locked out as costs rise. Melbourne couple Ashleigh Pullin and James Mashiter have been looking to buy their first home since April, but told Yahoo Finance they're coming up against stiff competition. 'You get very disappointed because you see the house you put an offer in, then it goes for another $30,000, $40,000 over, and you're not even competitive," Pullin said. RELATED Couple's $800,000 problem as RBA interest rate cuts fuel Aussie property frenzy Centrelink pension warning for 4.3 million Aussies facing super nightmare Aussie couple reveal 'cheaper' $400,000 housing solution How much could property prices rise after an interest rate cut? Data from the RBA, Cotality and AMP detailed how the property market reacted the first rate cutting cycles in previous years. In the 12 months following a reduction in February 2001, there was a 16.2 per cent jump in prices. After 18 months, prices had increased by 25.8 per cent — the biggest increase in the dataset. Even in the short term, values had increased by 3.6 per cent three months after the rate 2008 and July 1996 also saw considerable one-year growth, with a 4.9 and 6.9 per cent bump, respectively. The median price over 12 months increased by 2.6 per cent, and 7.9 per cent over 18 months. According to the Domain House Price Report for June, Australia's median house price currently sits at $1,207,857. If there was a 7.9 per cent lift in that price, homebuyers could be paying an extra $95,420 by July next year. The RBA's February meeting this year was the first rate cut that homeowners had received since 2020, and came after more than a dozen increases in the cash rate in 2022 and 2023. There was another cut in May, and experts have pencilled in possibly two more cuts for 2025, with the potential for further reductions in 2026. Domain modelling found if the cash rate fell by 1.5 per cent by early 2026 from 4.35 per cent rate, the median house price for the combined capitals could jump to $1.32 million. Westpac has predicted this could happen by May next year. A jump that significant would major headaches for homebuyers, however homeowners would relax knowing their asset is growing in value after three years of being battered by high interest rates. The RBA board will next convene on August 11 and 12 to determine whether the cash rate will change after a shock hold in July. Commonwealth Bank, ANZ, Westpac, and NAB all believe the Board will deliver a cut. Why rate cuts can increase property prices Property prices don't always go up in tandem with a falling cash rate. May 1982 and January 1990's first rate cuts saw property prices fall 4.5 and 0.1 per cent over 12 months, respectively. However, it's worth pointing out that Australia was in a recession during those periods. The price rises also aren't always significant. The November 2011 rate cut saw prices rise a modest 1.4 per cent in a year, and 4.4 per cent in 18 months. However, experts have warned that a reduction in the cash rate can create greater competition in the market. A lower cash rate means some people might finally be able to get pre-approval and buy a home, and it could increase someone else's borrowing power by a decent amount. But real estate stock is still very limited in some areas, and that can drive up prices. Pullen and Mashiter have had to change their goal posts several times as a result. 'We were looking at places that were four-bedroom, two-bathroom and two garages and that was comfortably within what we could afford, it was going for $760,000 to $790,000,' Mashiter told Yahoo Finance. 'Now we're struggling to find a three-bedroom place with two bathrooms. Anything with two bathrooms has gone over $800,000 every time. Buyer's agent Emily Wallace told Yahoo Finance she's seen a "sharp" increase in interest following the February and May rate cuts, and warned many buyers could end up like the Melbourne couple. "People who have financial literacy understand it and they're acting," Wallace said back in May. "By the time that reaches mass media, that might be two or three months down the track." What will happen at August's RBA meeting? Following the shock hold decision in July, the Big Four banks all shifted their prediction for the next rate cut to August. They had all suggested July was going to see a cut, however, the RBA said the unemployment rate and lack of broader inflation data encouraged it to err on the side of caution. By the time the Board met on July 7 and 8, it only had monthly consumer price index (CPI) information. However, the Australian Bureau of Statistics (ABS) drop its quarterly CPI assessment on Wednesday, which will give the RBA a much better understanding of where the country is at in its fight against inflation. Annual trimmed mean inflation fell to 2.9 per cent in the March quarter, which was the lowest level since December 2021. Economists have said if that number falls to 2.6 to 2.7 per cent for the June quarter, it could be very good news for homeowners next month when the RBA meets to discuss interest rates. The RBA has been pushing for trimmed inflation to be in the middle of its 2 to 3 per cent target zone. 'If the CPI is in line or a little bit higher than the RBA's trimmed mean forecast of 2.6 per cent for the year then I think we will get a rate cut," economist Shane Oliver said. 'If it is 2.8 or 2.9, then they might think, let's wait a little while longer.' Westpac chief economist Luci Ellis said the Board will repeat its July decision next month if CPI is still too high. But she said there could be mortgage relief coming in November, February and May, and said this 'spread-out timing' would be in line with the 'cautious approach the RBA has flagged'.Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données
Sky News AU
4 hours ago
- Business
- Sky News AU
Westpac urges a million Australians to move regionally to boost economy
Westpac is pushing for Australians to move to regional areas in hopes of boosting productivity. The nation's second-largest bank is encouraging a million people to move regionally to help boost living standards and the economy. Westpac's plans come after Australia's economy is expected to be the fastest growing over two years unless dragged down by inflation.
Sky News AU
21 hours ago
- Business
- Sky News AU
Major banks to repay $60 million to low-income Australians after corporate watchdog ASIC investigated excessive fees
Three major banks will repay almost $60m to low-income Australians after the corporate watchdog conducted its latest bank-fee review. Excessive fees that banks charged to low-earning Australians came under the microscope in a fresh report from the Australian Securities and Exchange Commission (ASIC). It follows a 2024 report from the corporate watchdog that demonstrated low-income customers, many of whom are Indigenous Australians, copped excessive fees - forcing major banks to repay $33m. ASIC said an additional $60m will be refunded to more than 770,000 customers across the nation. Westpac, ANZ and Bendigo and Adelaide Bank have agreed to repay the low-income customers who were in high-fee accounts. ANZ is returning almost $48m to low-income customers in high-fee accounts while Westpac is repaying almost $10m, and Bendigo Bank customers will receive about $150,000. Commonwealth Bank of Australia, which was also named in the 2024 report, will not make repayments of about $270m it charged low-income customers. The bank, however, has agreed to move 1.5 million customers to a new 'nominal fee account'. At least seven banks have improved processes, and an additional nine banks have made it easier to access low-fee accounts. This includes removing requirements to present a Commonwealth Seniors Health Care Card, Health Care Card or Pensioner Concession Card when opening an account. ASIC chair Joe Longo said despite the improvements Australian banks have made since the corporate watchdog launched its investigation, 'there is clearly work to be done'. 'It should not take an ASIC review to force $93m in refunds or make banks assess their processes to ensure the trust and expectations placed in them are justified,' Mr Longo said. 'Banks need to truly hear the messages in this report - read it, review it, and ask themselves some difficult questions about what led to this situation. 'We expect banks to regularly assess product design and distribution to ensure customers have the most appropriate products and that they are given the support they need.' The corporate watchdog highlighted the real impact these refunds would have on many Australians that receive government payments or earn minimum wage. It said that Charlotte, an ANZ customer in Western Australia that receives JobSeeker, will be refunded more than $5200 by ANZ – equivalent to 13 weeks of JobSeeker payments. A single parent from Adelaide named Cassie will be repaid $2645 - equivalent to about 110 hours of minimum-wage work - in overdraw fees by Westpac. Meanwhile, Derek, a pensioner from Victoria, has been refunded $1236 – equivalent to one fortnightly age pension payment - for Bendigo Bank fees. ASIC commissioner Alan Kirkland said the report highlighted how excessive bank fees hurt Australia's most vulnerable. 'When you read in the report that refunds of $1,200, $2,600 and $5,200 were paid, it's important to understand what those amounts mean for people struggling to make ends meet,' Mr Kirkland said. 'Our intervention has forced many banks to take action, but more needs to be done to ensure financially vulnerable consumers are not put in this position again. 'We encourage consumers to challenge their banks to ensure that they are in the best account for their needs. 'More importantly, we encourage banks to do more to proactively identify low-income customers and move them to low-fee accounts.'
