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Big 4 bank hit with $57.5m penalty
One of Australia’s big four banks has been ordered to pay a total of $57.5 million for fees-for-no-service breaches.
Big 4 bank hit with $57.5m penalty
One of Australia’s big four banks has been ordered to pay a total of $57.5 million for fees-for-no-service breaches.
Two entities in NAB’s wealth division, MLC Nominees and NULIS, will pay a penalty of $49.5 million and $8 million, respectively.
“The penalty imposed by the court reflects the very serious contraventions by MLC Nominees and NULIS and is the largest total penalty yet imposed in a civil action filed by ASIC,” said ASIC deputy chair Daniel Crennan QC.
“As the court observed, civil penalties must be sufficiently high to deter repetition by the contravener and others who might be tempted to contravene ... Fees-for-no-service conduct is particularly egregious, having resulted in substantial financial loss for thousands of unsuspecting consumers.”
The court found that MLC misled members in its MasterKey product and deducted approximately $33.6 million in plan service fees from 220,000 members who did not have a plan adviser.
The court also found that MLC and NULIS misled members and deducted approximately $71.9 million plan service fees from around 457,000 members of MasterKey Personal Super linked to plan advisers where plan advisers were not required to provide services and members did not receive services or any services they could not otherwise obtain for free.
“With this legal matter resolved and important lessons learned, we are now moving forward and are focused on serving our customers well,” said Sharon Cook, NAB group executive for legal and commercial services.
“Customers should never have been charged for a service that was not received, and NULIS and MLCN should have made it clearer that customers could switch off the plan service fee. NULIS and MLCN stopped charging plan service fees by November 2018. Members from whom the fee was deducted have been fully compensated, including being paid interest. A total of $117 million was paid to members and payments were made by May 2019.”
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