Corrective Notice ordered by the Federal Court of Australia
The Federal Court found that in the period from January 2017 until July 2018 NAB continued to charge its customers periodical payment fees (PP Fees) in circumstances where it knew it had no contractual entitlement to charge those fees and omitted to inform its customers as to the wrongful charging or suggest that they review any such fees debited to their accounts.
On 22 September 2023, Derrington J of the Federal Court of Australia (in proceeding QUD 54 of 2021) ordered NAB to pay a pecuniary penalty of $2,100,000 to the Commonwealth of Australia for its unconscionable conduct in relation to the charging of PP Fees.
Customers who set up periodical payment arrangements with a NAB employee paid a recurring fee. There were exemptions to those fees, which NAB failed to apply for certain customers. NAB also charged certain customers a higher fee.
Between January 2017 and July 2018 (Relevant Period), the Court found NAB engaged in unconscionable conduct by continuing to charge PP Fees to customers in circumstances where it knew it had no contractual entitlement to do so and omitting to inform its customers of the wrongful charging, or suggest that they review any such fees debited to their accounts.
Over the Relevant Period, NAB wrongfully charged PP Fees on 74,593 occasions to personal and business banking customers totalling $139,845.90.
NAB has remediated almost all of the customers affected by the conduct described above. As at 17 September 2021, NAB had been unable to pay remediation to 72 affected customers in respect of $1,610.10 PP Fees that were charged incorrectly during the Relevant Period.
The Court ordered NAB to publish this Corrective Notice.
For further information, visit ASIC’s media release here.
See the Court’s judgment here.