Millions of banking customers on low incomes – including First Nations people – are set to receive refunds, after the corporate watchdog found banks were charging high fees to customers who couldn’t afford them.

The Australian Securities and Investments Commission (ASIC) found five banks kept more than two million customers in high fee accounts, despite the customers being on low incomes and a significant proportion relying on Centrelink.

Many of the affected customers were from regional and remote communities, with large First Nations populations.

ASIC’s commissioner Alan Kirkland said the banks in question – ANZ, Bendigo Bank and Adelaide Bank, Commonwealth Bank and Westpac – were “forced to act” due to the watchdog’s intervention.

“Before our review, most banks only provided their customers with difficult ‘opt-in’ processes for switching to low-fee banking options, including forcing some consumers to travel hundreds of kilometres to their nearest bank branch,” Mr Kirkland said.

When will the refunds come through?

The banks will refund customers who were paying inappropriately high fees over the next 12-18 months, according to ASIC.

A massive $24.6 million of more than $28 million will be refunded to customers receiving ABSTUDY payments, as well as those in areas with large First Nations populations, ASIC said.

“We expect all banks – not just those we reviewed for this report – to consider these findings, improve the accessibility and distribution of low-fee accounts and commit adequate resourcing to specialist First Nations services,” Mr Kirkland said.

If you’re concerned about money or debt, you can contact Mob Strong Debt Helpline – 1800 808 488 – or the National Debt Helpline – 1800 007 007.