NAB's $57.5 million penalty, the "largest imposed in a civil action"
ASIC deputy chair Dan Crennan has described National Australia Bank's $57.5 million penalty for fee for no services breaches as the “the largest total penalty imposed in a civil action filed by ASIC".
As previously reported, two of NAB's wealth management businesses were ordered to pay a $57.5 million penalty for fee for no service breaches, following a finding by the Federal Court.
The Federal Court found that NULIS Nominees and MLC Nominees made false and misleading representations to superannuation members about their entitlement to charge plan service fees and members’ obligations to pay the fees.
The Court said that MLC Nominees and NULIS failed to ensure that their financial services were provided efficiently, honestly and fairly.
MLC Nominees will pay a total penalty of $49.5 million, while NULIS will pay a penalty of $8 million.
“The penalty imposed by the court reflects the very serious contraventions by MLC Nominees and NULIS and is the largest total penalty yet imposed in a civil action filed by ASIC,” Crennan said.,
“As the court observed, civil penalties must be sufficiently high to deter repetition by the contravener and others who might be tempted to contravene,” Crennan added.
“Achieving specific and general deterrence by pursuing civil penalties through the courts is a key focus of the Office of Enforcement.”
The actions date back to 2012 and 2017 where MLC misled members in the MasterKey Product and deducted about $33.6 million in service fees from about 220,000 members of MasterKey Business Super (MKBS) and MasterKey Personal Super (MKPS), divisions of the MasterKey Product, who did not have a Plan Adviser.
Between 8 September 2012 and 30 September 2018, MLC and NULIS misled members and deducted about $71.9 million service fees from about 457,000 members of MasterKey Personal Super linked to Plan Advisers where Plan Advisers were not required to provide services and members did not receive services or any services they could not otherwise obtain for free.
For Crennan, fees for no service conduct is “particularly egregious, having resulted in substantial financial loss for thousands of unsuspecting consumers.
“ASIC will continue to bring enforcement action against this misconduct and other case studies from the royal commission.
“This demonstrates our resolve to deliver on the public’s expectation that we hold wrongdoers of all dimensions to account.”