A hearing compensation system comprises a plurality of bandpass filters having an input connected to an input transducer and each bandpass filter having an output connected to the input of one of a plurality of multiplicative automatic gain control (MAGC) circuits whose outputs are summed together and connected to the input of an output transducer. The MAGC circuits attenuate acoustic signals having a constant background level without the loss of speech intelligibility. The identification of the background noise portion of the acoustic signal is made by the constancy of the envelope of the input signal in each of the several frequency bands. The background noise that will be suppressed includes multi-talker speech babble, fan noise, feedback whistle, florescent light hum, and white noise. For use in the consumer electronics field background acoustic noise may be sensed and used to adjust gain in the various MAGC circuits so as to improve a user's listening experience, whether the user is hearing impaired or not.