NAB executive denies lender looked for ways to avoid paying customers back
A NATIONAL Australia Bank executive has been forced to deny to the banking royal commission that the lender “systematically” looked for ways to avoid paying back tens of millions of dollars to customers it had wrongly charged.
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A NATIONAL Australia Bank executive has been forced to deny to the banking royal commission that the lender “systematically” looked for ways to avoid paying back tens of millions of dollars to customers it had wrongly charged.
Counsel assisting the commission, Michael Hodge QC, claimed that when the bank discovered it had been charging the fee, it trawled through its files looking to see if it had provided any service that would allow them to keep the cash.
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“You systematically looked for ways to avoid having to refund all of the money to the customers,” Mr Hodge said.
The executive Paul Carter, who ran various NAB wealth operations between 2013 and 2017, said he disagreed.
Mr Carter said the bank “assessed that option” but ended up paying back the customers.
He also denied NAB was now trying to blame younger staff members for the strategy of looking for ways to keep the customer money.
“It was junior people who put that to me. But I don’t want to imply it was an issue I didn’t turn my mind to,” Mr Carter said.
Yesterday, Mr Carter said some NAB bosses “felt an entitlement” to continue charging super customers tens of millions of dollars for having a financial adviser — even if they didn’t — because the bank provided a call centre and online tools.
He said management made a mistake in thinking it could charge the fee.
Mr Carter now heads the chief customer officer for consumer and wealth at NAB’s New Zealand operation BNZ.
The royal commission saw internal documents showing 220,000 members had been incorrectly charged $35 million. Those customers were paid back two years ago.
But two weeks ago, NAB said it would pay an additional $67 million to customers who paid fees for general financial advice they didn’t know they could opt out of.
It yesterday came to light a further $20 million was paid for lost investment earnings for the same customers.
Later today, the commission is expected to turn its attention to the question of why super funds looking after Australian’s retirement savings are bankrolling The New Daily news website.
Counsel assisting the commission, Michael Hodge QC, yesterday revealed the commission will scrutinise the website as it examines the use of consumer’s retirement savings over the next two weeks.
The New Daily is owned by Industry Super Holdings, which is in turn owned by a range of union-affiliated and not-for-profit “industry” super funds.
The site is produced by Motion Publishing, with directors including former Herald Sun and The Age editor, Bruce Guthrie and digital publisher Eric Beecher.
“AustralianSuper is the largest shareholder in Industry Super Holdings, followed by CBUS, Hesta and Host-Plus. Industry Super Holdings owns various entities that provides services to the industry funds,” Mr Hodge said yesterday.
During this round of hearings, the commission is examining scandals in the super industry, which holds $2.6 trillion of Aussie retirement funds.
The hearings are taking place at the Federal Court in Melbourne.
Counsel assisting the commission Michael Hodge QC also revealed the commission has been flooded with tales of Australians being whacked by superannuation fees for advice and insurance they didn’t ask for.
In his opening statement for the fifth round of hearings yesterday, he also showed evidence that Australians were often not financially literate enough to understand their super documentation.
As a result, many would struggle to keep track of their retirement savings performance, Mr Hodge said.
He also said there was some confusion between the main regulators, the corporate cop — the Australian Securities and Investments Commission — and the bank regulator, the Australian Prudential Regulation Authority, in co-operating to oversee the system, he said.
Mr Hodge asked what happened when trustees were tempted to do the wrong thing.
“What happens when we leave these trustees alone in the dark with our money? Can they be trusted? If they cant what must be done to protect Australian’s retirement savings?”
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