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Big 4 bank slapped with $18.5m fine for inflicting harm on customers
NAB has been slapped with an $18.5 million fine for causing harm to customers.
Big 4 bank slapped with $18.5m fine for inflicting harm on customers
The Federal Court has ordered National Australia Bank Ltd (NAB) to pay an $18.5 million penalty for failures relating to misleading fee disclosure statements.
The court also declared that NAB contravened its obligations as an Australian Financial Services Licence holder to act efficiently, honestly and fairly by failing to have procedures and systems in place to provide timely and effective fee disclosure statements.
“NAB’s system failures resulted in significant fee disclosure failures over an extended period. This caused harm to customers as the inaccurate information meant they couldn’t make informed decisions about the financial services they were paying for,” said ASIC deputy chair Sarah Court.
“The penalty of $18.5 million handed down to NAB is a timely reminder to financial services licensees to ensure they meet their obligations to their clients.”
According to the court, NAB breached the law on numerous occasions when it charged fees for personal advice without giving customers compliant fee disclosure statements; failed to provide fee disclosure statements to clients within the time required; and, made false or misleading representations to clients in fee disclosure statements about the amount clients had paid for services.
Moreover, NAB failed to maintain systems and procedures to identify whether services were provided in accordance with client service agreements; its fee disclosure statements were compliant; and it was prohibited from charging service fees.
“Customers need to have confidence in their financial services providers that they will be charged correctly for the services they receive and given accurate and timely information,” said deputy chair Court.
Shortly after ASIC’s notice, NAB responded by issuing a statement of acknowledgment.
NAB group executive, legal and commercial services, Sharon Cook said: “We sincerely apologise to those customers who were impacted by this issue.
“To address this issue, NAB stopped charging ongoing service fees to customers of its former NAB Financial Planning business in 2019. In 2020, we established a remediation program which has to date paid approximately $31 million to more than 15,000 customers in order to make things right,” Ms Cook said.
NAB has also been ordered to pay ASIC’s costs.
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