Two of Australia’s major banks have been forced to refund a combined $21 million to credit card customers – including businesses – for improper disclosure and limit increase provisions.
Around 3,400 Westpac customers have already, or will soon receive, refunds worth $11.3 million after ASIC expressed concerns about how the bank and its subsidiaries provided card limit increases.
Westpac has committed to improve its inquiries process to ensure customers have the financial ability to pay off card balances. In doing so, it reviewed credit limit increases to customers who subsequently experienced financial distress.
The bank has refunded around $3 million worth of fees and interest, and waived a further $8.3 million in credit card balances.
The impacted customers hold cards with either Westpac, St.George, BankSA or Bank of Melbourne.
Meanwhile, failure to properly disclose credit card charges will see 52,135 business credit card account holders receive refunds from ANZ.
The bank admitted that in some instances, customers of its ‘Business One’ card were either not informed, or were incorrectly informed, of a number of fees and terms associated with the product, including applicable interest rates, interest-free periods, overseas transaction fees and the annual fee.
ANZ has agreed to refund $10.2 million to the affected businesses, with current customers to receive funds directly in their accounts and former customers to be refunded by bank cheque.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.