NAB Ordered to Pay $2.1 Million Penalty for Unconscionable Conduct

The court determined that from January 2017 to July 2018, NAB continued to charge its customers periodical payment fees despite having no contractual entitlement to do so. Moreover, the bank failed to inform its customers about these wrongful charges or suggest that they review such fees debited to their accounts.

Additionally, NAB charged certain customers higher fees than what had been initially agreed upon. As a result of this misconduct, NAB wrongfully charged periodical payment fees on a total of 74,593 occasions, amounting to $139,845.90 for both personal and business banking customers.

It is worth noting that NAB has taken steps to remediate most of the affected customers.

Justice Derrington's Observations on the Penalty Amount

When determining the penalty amount, Justice Derrington noted that the primary cause of the wrongful charging was NAB's inability to effectively manage its computer systems and its failure to allocate sufficient resources to address the problem in a timely manner.

"The central cause of the wrongful charging was NAB's inability to manage its own computer systems and its unwillingness to apply sufficient resources to remedy the problem in a timely manner. These reasons deal with the penalty… which has been assessed at $2.1 million. That is the maximum penalty that the legislation, as it existed at the time of the contravening conduct, permits the Court to impose in the circumstances of this case."

"Unfortunately, it is wholly inadequate when viewed against the nature of NAB's conduct, especially its disregard of its customers' rights over an extended period of time. In a context where NAB has been a repeat offender against the financial services legislation in this country and, as this case and others reveal, it appears to place a low priority on respecting the legal rights of its customers, a penalty several times the statutory maximum would have been far more appropriate."

Published:Friday, 29th Sep 2023
Source: Paige Estritori

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