The Australian Securities and Investments Commission (ASIC) has mandated refunds after uncovering that major banks, including ANZ, Bendigo and Adelaide Bank, Commonwealth Bank of Australia, and Westpac, charged excessive fees to customers.

As a result, nearly two million low-income Australians are expected to receive refunds totaling over $28 million.

The ASIC report, titled 'Better Banking for Indigenous,' highlighted that many affected customers, particularly First Nations individuals, were subjected to these excessive fees.

ASIC Commissioner Alan Kirkland emphasized that these banks caused significant financial distress through avoidable fees and complicated processes for switching accounts.

Kirkland pointed out that banks had previously made it challenging for low-income customers to transition to low-fee accounts.

In response to the findings, the banks involved have transferred over 200,000 customers to low-fee accounts, resulting in estimated savings of $10.7 million for these customers.

Customers have started noticing unexpected refunds in their accounts, with some sharing their received amounts on social media, such as $105 and $777.64.

This report marks the second ASIC report in two months that indicates banks have failed to prioritize the needs of their customers.

Kirkland has called for improved banking services for all Australians, especially those on low incomes or living in remote areas.