NAB to cut off services to financial abusers

From November, the bank will seek to identify customers found to be abusing family members, partners or dependants and put them on notice for account suspension.

National Australia Bank will start cutting off customers who are identified as committing financial abuse after a women's group last year called for banks to improve their systems to better protect customers.

From November, NAB will seek to identify customers found to be abusing family members, partners or dependants, putting them on notice for a suspension or termination of their services, the lender said in a statement on Monday.

“Concerns about financial abuse remain one of the top reasons customers get in touch with … NAB Assist,” said the bank’s head of customer vulnerability, Michael Chambers.

“Financial abuse can take many forms, including where an individual is denied access to their own funds or has their funds misused by another individual,” he said.

NAB’s customer support team receives more than 1,000 customers a day seeking financial support, including victims of domestic violence and financial abuse.

The move will incorporate the policy into the term and conditions for its services from November. It comes after a paper commissioned by the Centre for Women’s Economic Safety last year called for all banks to redesign their products to better protect against their use as weapons for financial abuse or coercive control.

It reported cases of financial abuse where a victim’s partner stopped paying their share of a mortgage and where the partner maxed out credit cards, leaving the bank to pursue the victim to repay the partner’s debts.

National Australia Bank will start cutting off customers who are identified as committing financial abuse.

NAB’s new policy will seek to identify suspected customers and put them on notice by labelling their accounts “unacceptable account conduct”.

“If a NAB account holder is now found to be perpetrating financial abuse, we will be able to suspend or terminate their services,” Mr Chambers added.

This form of control can occur between couples, family members, or relationships where one person is providing care for another.

In 2020, more than 620,000 people were subjected to financial abuse, according to a Deloitte Economics report commissioned by Commonwealth Bank. It costs victims more than $5.6bn and the broader economy over $5.2bn, the research found.

As recently as March, none of the banks referenced financial abuse in the terms and conditions of its products, according to the Centre for Women’s Economic Safety.

Commonwealth Bank earlier this month told a banking conference it would name financial abuse as an unacceptable customer behaviour in the terms and conditions of some of its products.

“This response from two of Australia’s major banks puts perpetrators ‘on notice’ that institutions are going to make it harder for them to use financial abuse as a tactic of coercive control. And, importantly, that they’ll take action,” CWES’ chief executive Rebecca Glenn said.

“Few other businesses are better placed to protect women against financial abuse and its devastating health and economic impacts for them and their children.”

Following in the footsteps of CBA, NAB also blocks messages with abusive language in the transaction description fields or used to threaten, harass and intimidate on their digital banking platforms.

NAB, which is led by Ross McEwan, has blocked more than 200,000 abusive transactions, using technology that searches for keywords, since January 2022.

The bank is also working with other lenders “to help develop a consistent approach across the industry,” Mr Chambers said.

The banking industry last year updated guidelines to prevent and respond to financial abuse, including giving guidance on its definition.

NAB shares were down 1.2 per cent to $25.48 in a lower market on Monday afternoon.