CommBank Faces Backlash for Refusing $270 Million Refund
Commonwealth Bank received its fourth CHOICE Shonky Award, a distinction for poor business practices, for rejecting a $270 million refund to 2.2 million low-income customers who were charged illegal fees on Centrelink payments between 2019 and 2024.
The Award and Its Significance
This marks the fourth time CommBank has won the CHOICE Shonky Award, making it the most frequently recognized company in the award's 20-year history. This year’s criticism centers on the bank's refusal to return fees collected unlawfully from vulnerable customers amid significant profits.
The Fee Scandal
ASIC found that CommBank imposed excessive account fees on customers receiving Centrelink payments—including JobSeeker, Age Pension, and Disability Support—between July 2019 and October 2024. These customers qualified for accounts with low or no fees, yet were still charged.
Comparison with Other Banks
- ANZ refunded $47.9 million to its affected customers.
- Twenty-one other banks together returned $93 million.
- CommBank compensated only $25 million, which went to 87,000 Indigenous customers, before refusing refunds to others.
- Initially, CommBank denied refunds entirely, later offering to review cases individually.
Context and Public Reaction
CommBank announced a $10 billion profit shortly after declining the refund and holds $49.6 billion in cash reserves. A national poll showed 88% of Australians believe the bank should repay the fees.
Imagine you're on JobSeeker, struggling to buy groceries during a cost-of-living crisis.
Such decisions have deep consequences for low-income individuals facing financial hardship.
Author’s Summary
Despite huge profits, CommBank's refusal to refund illegal fees to millions of low-income Australians highlights ongoing social and ethical concerns in banking practices.