It’s all the customers’ fault, says NAB at royal commission

In 2011, NAb spent millions telling Australians it was “breaking up” with the other major banks, pledging to do things differently.

Andrew Hagger: From ‘Executive, Wealth’ to ‘Chief Customer Officer’ at NAB. Picture: AAP

In 2011, National Australia Bank spent millions telling Australians it was “breaking up” with the other major banks, pledging to do things differently.

It must come as some surprise then, just a few years later in 2016, that NAB’s spin doctors were trying to keep the bank as “just one in the pack”, not an “outlier” and in the “middle” of the major banks.

This time, though, the corporate affairs executives at NAB were trying to downplay how badly the bank had stung its customers for fees where no service was given.

Two years later and the bank is still stalling on the problem, if the protracted testimony of NAB executives Paul Carter, Nicole Smith and Andrew Hagger at the royal commission is anything to go by.

Despite having to repay about $100 million in fees charged to its superannuation customers where no service has been given, executives have drawn the ire of commissioner Kenneth Hayne and counsel assisting, Michael Hodge QC, for bloviating rather than providing direct answers to questions.

The commission has heard evidence that a so-called “plan service fee” was about providing “access” to potential basic services such as marketing material or the MLC website; services that are provided to members regardless of whether they are being stung for the fee.

And the so-called “adviser contribution fee” is apparently now considered a “commission”, which doesn’t require there to be any service, even though in 2012 the employers who agreed to it were told the impost was a fee for service from a financial adviser.

Where do customers feature in all this at a bank that boasts of being “customer centric”? During the time NAB has been dealing with the Australian Securities & Investments Commission over charging fees for no service, the bank has been preoccupied with maintaining its reputation and overhauling its image. In August 2016, two months before the bank spent mountains of effort plotting to massage its compensation figures due to be published by ASIC, NAB was busy touching up its executive ranks.

“Personal Banking” was renamed “Consumer Banking” and Mr Hagger had his role changed from “Executive, Wealth” to “Chief Customer Officer” of the retail division. In fact, NAB appointed two other “Chief Customer Officers” to the business and corporate divisions.

According to Mr Hagger yesterday, one role of a customer is to know when they had been gouged and when they had not. “We had a fundamental belief, which I still hold today, that customers tend to know whether service has been provided or not,” Mr Hagger said.