September 14, 2020 | AtoZ Markets – The Federal Court of Australia has fined NAB’s wealth management division with an AUD 57.5 million ($41.9 million) penalty for “no service” breaches.
According to the Australian Securities and Investments Commission (ASIC), two NAB entities – NULIS Nominees (Australia) Limited and MLC Nominees – made “false and misleading representations” to superannuation members about their entitlement to charge plan service fees and members’ obligations to pay the fees. The court also says MLC and NULIS failed to ensure that their financial services were provided “efficiently, honestly and fairly”.
ASIC Deputy Chair Daniel Crennan QC states:
“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.”Crennan adds: “Fees for no service conduct is particularly egregious, having resulted in substantial financial loss for thousands of unsuspecting consumers.”
NAB fined for misleading and deceptive conduct
To keep it reasonably concise, between September 2012 and June 2016, MLC misled members in the MasterKey Product and deducted approximately AU$33.6 million ($24.4 million) in plan service fees from approximately 220,000 members.
Between September 2012 and September 2018, MLC and NULIS both misled members and deducted approximately AU$71.9 million ($52.3 million) plan service fees from approximately 457,000 members.
NAB’s entities failed to inform members that, when they transferred from different products, they could “turn off” their plan service fee.
In his decision, Justice Yates described NULIS and MLC’s contraventions of s12DB of the ASIC Act as “very serious”.
ASIC acknowledges that MLC and NULIS made admissions of liability during the proceedings and notes that this cooperation was taken into account by Justice Yates in determining the penalty.
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