Australian corporate regulator has filed a civil lawsuit against National Australia Bank (NAB) for ‘fees for no service’ and related failures.
The move comes at a time when another Australian lender Westpac is embroiled in money laundering controversy.
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In a statement, the Australian Securities and Investments Commission (ASIC) alleged that NAB was involved in Fees for No Service Conduct from December 2013 to February 2019.
The lender charged a large number of its customers for financial planning services that was not provided to them.
In the same period, NAB failed to issue or issued defective fee disclosure statements (FDSs) with false or misleading representations.
The ASIC also alleged that the Australian lender failed to establish processes to identify and prevent these failures.
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By GlobalDataFurthermore, the regulator claimed that NAB continued to charge customers even after it was cognizant of the failures since May 2018.
Through the civil action, ASIC seeks to impose pecuniary penalties on the bank.
Fees for no services lapses can draw a penalty of up to A$250,000 ($171,378) per breach. Unconscionable conduct and misrepresentation will invite a fine of A$1.7m to A$2.1m per contravention.
It is estimated that NAB, if found guilty, will have to pay nearly A$10bn ($6.85bn).
In a separate statement, NAB confirmed the lawsuit. It also said that it has initiated the remediation process to compensate affected customers.
NAB chief legal and commercial counsel Sharon Cook said: “We take this action seriously and will now carefully assess the allegations.
“We will continue to work co-operatively and constructively with ASIC to deal with this issue.”
