Australian Court Fines NAB $15M for Engaging Unlicensed Introducers

The Federal Court of Australia has fined National Australia Bank (NAB) $15 million today, finding the Bank guilty of contravening the National Credit Consumer Protection Act(the National Credit Act). 

According to the file provided by the Australian Securities and Investments Commission (ASIC), NAB was charged with accepting information and documents in support of consumer loan applications from third-party introducers who were not licensed to engage in credit activity.

NAB was Accused of a Crime

The penalty came after ASIC last year commenced proceedings in the Federal Court against NAB for breaches of the law arising from failures within its introducer program.

The financial services regulator’s investigation revealed that between 3 September 2013 and 29 July 2016, NAB bankers received information from introducers that went beyond their remit of ‘spot and refer’.

Under the “spot and refer” introducer program, introducers referring customers to NAB were meant to only provide the bank with the potential customer’s name and contact details. In addition, if an introducer plans to provide NAB with further information or documents, the law requires that the introducer should be authorised under an Australian Credit Licence (ACL).

Specifically, the National Credit Act prohibits credit licensees from conducting business with parties engaging in credit activity without an ACL.

NAB admitted certain breaches. “We ended the Introducer Payments Program in October 2019 and in November 2017 we established a remediation program, which has paid about $5 million to impacted customers.”said NAB Group Executive, Legal and Commercial Services, Sharon Cook.