Federal Court Imposes A$57.5m Penalty Against NAB Units

NULIS Nominees and MLC Nominees admitted to misleading or deceptive conduct, false or misleading representations, and breaches of the ASIC Act and Corporations Act.

Australia’s Federal Court has imposed a penalty of AUD 57.5 million (USD 42 million) against NAB (National Australia Bank) units NULIS Nominees and MLC Nominees for charging fees for services not provided to hundreds of thousands of superannuation customers.

The ruling was the result of civil proceedings launched by ASIC (Australian Securities and Investments Commission) in  September 2018, in which the corporate regulator alleged the two firms misled members of ‘MLC MasterKey Super’ products.

On Friday (11 September), the NAB trustees admitted to certain conduct that was misleading or deceptive and false or misleading representations, as well as consequential breaches of the ASIC Act and the Corporations Act.

The breaches were related to the charging of plan service fees to MLC MasterKey Business and Personal Super fund members between 2012 and 2018.

The fee was imposed to cover the cost of an adviser, linked to the member’s employer. Those employees could turn off the fee when they changed jobs, but members were not told they could do so.

NULIS and MLC stopped charging plan service fees by November 2018, and have since compensated members from whom the fee was deducted, including interest. A total of AUD 117 million was paid to members by May 2019.

“Customers should never have been charged for a service that was not received, and NULIS and MLCN should have made it clearer that customers could switch off the Plan Service Fee,” NAB group executive for legal and commercial services, Sharon Cook, said in a statement.

“With this legal matter resolved and important lessons learned, we are now moving forward and are focused on serving our customers well.”

Additional reporting from Sydney Morning Herald.