The Federal Court of Australia has issued the National Australian Bank (NAB) a civil penalty of $15m over a loan-introducer scheme.
NAB’s penalty was the result of engaging with certain ‘introducers’ – who did not have Australian Credit Licences (ACL) – to assist the bank customers with home loans.
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The Australian Securities and Investments Commission (ASIC) investigated the lender and pushed the case forward against NAB for violating the National Consumer Credit Protection Act 2009.
ASIC’s investigations revealed that NAB bankers accepted at least 260 consumer loan applications from 25 unlicensed third-party introducers, between 3 September 2013 and 29 July 2016.
At the outset, NAB was fined $100,000 for each application or contravention of the Credit Act.
However, the Federal Court discounted the fine amount to $15m as the bank cooperated with regulators.
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By GlobalDataLoan-introducer programme
The loan-introducer programme was a referral programme operated by the bank from 2000 to 2019.
Under this scheme, a third-party introducer can refer customers to NAB. If these customers enter a loan with the bank, the introducer is paid a commission.
The introducers were only supposed to provide NAB with potential customer’s name, contact details and a reason for seeking credit.
The ASIC’s investigation, however, revealed that NAB bankers accepted the information from unlicensed introducers.
Moreover, they also accepted payslips, copies of customer identification documents and more, in addition to home loan applications.
The watchdog also found out that some of these documents were false. NAB scrapped the programme in October last year.
ASIC is not only taking actions against NAB but also investigating four individuals involved in the violation of the Credit Act.
These include former NAB employees Danny Merheb and Samar Merjan, and former branch managers Rabih Awad and Mathew Alwan.
Merheb and Merjan were permanently banned from engaging in credit activities, Awad was banned for seven years, while Alwan was also permanently banned in addition to 12-month imprisonment.
