Borrow
Coughing up $49.5m for dodgy consumer credit practices
The Federal Court has approved of a $49.5 million class action settlement that related to NAB and MLC’s sale of consumer credit insurance (CCI) to vulnerable customers.
Coughing up $49.5m for dodgy consumer credit practices
The Federal Court has approved of a $49.5 million class action settlement that related to NAB and MLC’s sale of consumer credit insurance (CCI) to vulnerable customers.
The action was first brought against NAB and MLC Ltd by Slater and Gordon in September 2018 and concerned allegations of “unconscionable conduct”.
NAB and MLC were reported to have engaged in contravention of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) by selling insurance to cardholders who were “ineligible to claim under the terms of the policy”.
At the time the class action was filed, Slater and Gordon said all claimants had a NAB credit card and were then offered credit card insurance.
“However, it was highly unlikely that they would benefit from this policy,” according to class actions principal lawyer Andrew Paull.
Ineligible customers that were sold the insurance included students, those without gainful employment, and individuals on disability pensions.
Mr Paull had also alleged that some customers with existing life and/or income protection insurance were still encouraged to take out insurance on their credit card, despite already being covered by their existing policies.
He had commented that “both NAB and MLC were in much stronger bargaining positions than any of the people they were contacting and selling this insurance to”.
The proceedings were related to two CCI products: NAB Credit Card Cover (NCCC) and NAB Personal Loan Cover (PLC).
In acknowledging the Federal Court’s approval of the settlement, NAB noted it no longer sells CCI products.
Responding to the announcement, the bank’s chief legal and commercial counsel, Sharon Cook, said: “We are pleased with the Federal Court’s decision and to be able to resolve this matter for our customers and shareholders.
“As we have acknowledged, it is important to resolve past issues so that we can rebuild trust with our customers and the community.”
RELATED ARTICLES
About the author
About the author
Banking
Banks urged to embrace existing payment technologies over AI hype
In the rapidly evolving landscape of financial technology, the focus has increasingly shifted towards artificial intelligence (AI) as the next frontier for innovation. However, Ian Boyd, General ...Read more
Banking
EMEA banks enjoy profit growth amid revenue challenges in 2025
In a year marked by economic turbulence and geopolitical uncertainties, the largest banks across Europe, the Middle East, and Africa (EMEA) have reported a paradoxical trend: shrinking or stagnant ...Read more
Banking
Australian major banks demonstrate resilience amid economic uncertainty
In the face of economic headwinds, Australia's major banks have reported robust half-year results, showcasing their resilience amid rising uncertainty. According to KPMG’s Australian Major Banks Half ...Read more
Banking
RBA's new ruling on card surcharges sparks debate among businesses and banks
In a significant move aimed at enhancing transparency and fairness in the Australian payments landscape, the Reserve Bank of Australia (RBA) has announced the removal of surcharging on debit, prepaid, ...Read more
Banking
Australian SMBs lose two business weeks annually to late payments, report finds
In a startling revelation, the latest report by GoCardless, a global bank payment company, highlights the crippling impact of late payments on small and medium businesses (SMBs) across AustraliaRead more
Banking
Brighten’s reverse‑mortgage bet: why a niche product could be non‑banks’ next profit engine
Brighten has created a dedicated reverse‑mortgage leadership post, signalling a strategic push into equity release as Australia’s demographic curve tilts older and wealth concentrates in housingRead more
Banking
Why banks are moving at different speeds after the RBA hike — and how to turn timing into advantage
The Reserve Bank’s latest cash rate move has triggered an uneven response from lenders — a pattern that reveals more about funding structures, risk appetites and systems readiness than headline ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
Banking
Banks urged to embrace existing payment technologies over AI hype
In the rapidly evolving landscape of financial technology, the focus has increasingly shifted towards artificial intelligence (AI) as the next frontier for innovation. However, Ian Boyd, General ...Read more
Banking
EMEA banks enjoy profit growth amid revenue challenges in 2025
In a year marked by economic turbulence and geopolitical uncertainties, the largest banks across Europe, the Middle East, and Africa (EMEA) have reported a paradoxical trend: shrinking or stagnant ...Read more
Banking
Australian major banks demonstrate resilience amid economic uncertainty
In the face of economic headwinds, Australia's major banks have reported robust half-year results, showcasing their resilience amid rising uncertainty. According to KPMG’s Australian Major Banks Half ...Read more
Banking
RBA's new ruling on card surcharges sparks debate among businesses and banks
In a significant move aimed at enhancing transparency and fairness in the Australian payments landscape, the Reserve Bank of Australia (RBA) has announced the removal of surcharging on debit, prepaid, ...Read more
Banking
Australian SMBs lose two business weeks annually to late payments, report finds
In a startling revelation, the latest report by GoCardless, a global bank payment company, highlights the crippling impact of late payments on small and medium businesses (SMBs) across AustraliaRead more
Banking
Brighten’s reverse‑mortgage bet: why a niche product could be non‑banks’ next profit engine
Brighten has created a dedicated reverse‑mortgage leadership post, signalling a strategic push into equity release as Australia’s demographic curve tilts older and wealth concentrates in housingRead more
Banking
Why banks are moving at different speeds after the RBA hike — and how to turn timing into advantage
The Reserve Bank’s latest cash rate move has triggered an uneven response from lenders — a pattern that reveals more about funding structures, risk appetites and systems readiness than headline ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
