NAB agrees statement of facts in ‘fees for no service’ case

NAB is believed to have accepted it engaged in misleading or deceptive conduct when it charged superannuation customers fees for services it never provided.

NAB is believed to have admitted to the Federal Court it engaged in misleading and deceptive conduct when it charged superannuation customers fees for services it never provided.

It comes as the corporate regulator filed a statement of agreed facts and admissions with the court in its case against NAB wealth management companies MLC Nominees and NULIS, which it launched last year following the fees for no service scandal that rocked the banking royal commission.

The statement, filed on October 28 and seen by The Australian, sets out facts that ASIC, MLC Nominees and NULIS have agreed are not in dispute.

“The statement is made in relation to proposed orders to be sought by ASIC which have been agreed between the parties,” the regulator said on Monday.

Until now, NAB has sought to differentiate its actions in relation to customers it charged fees for no service into “linked” and “unlinked” categories. While it previously accepted that its wealth divisions engaged in misleading or deceptive conduct for members who were not linked to a plan adviser, this is the first time it has admitted the misleading or deceptive conduct for members who were linked to an adviser.

NAB first noticed issues with its plan fees in 2015 and self-reported to ASIC late that year. The bank was heavily criticised at the banking royal commission for attempting to minimise the gravity of the issue. The scandal claimed the scalps of NAB’s CEO Andrew Thorburn, chairman Ken Henry and chief customer officer Andrew Hagger.

The bank has since refunded $114m in plan service fees, completing the refund process last April. It ceased charging the fees in late 2018.

In documents filed with the Federal Court last year, in the first legal action ASIC launched over the scandal, the regulator alleged that super trustees NULIS and MLC Nominees misled members of MLC MasterKey Super products.

It also alleged the two NAB units deducted $33m in plan service fees from 220,000 members of MLC MasterKey Business and MLC MasterKey Personal Super who did not have plan adviser. NAB also deducted approximately $67m plan service fees from 300,000 members of MLC MasterKey Personal Super where plan advisers were not required to provide services and members did not receive services, ASIC alleged.

MLC Nominees last year admitted to misleading or deceptive conduct in its communications with 220,000 super fund members regarding the charging of fees for accounts that had no adviser linked but it denied NULIS was liable and also denied breaking the law in relation to the $67m it charged 300,000 customers who had an adviser but the adviser wasn’t required to do anything despite the fees paid.

ASIC stopped short of accusing NAB of crimes, instead seeking civil fines and declarations the bank broke the law.