Global: NAB Penalized $1.4 Million for Unlawful Fees

The National Australia Bank (NAB) is facing a substantial penalty of $1.4 million ($2.1 million AUD) imposed by the Australian Federal Court for inappropriately levying periodic payment fees on customers.

According to the Australian Securities and Investments Commission (ASIC), NAB wrongfully imposed these fees on 2,888 personal account holders and 513 business accounts between January 2017 and July 2018. Over this period, the bank charged these accounts a total of 74,593 times, amassing $139,845 AUD.

Sarah Court, Deputy Chair of ASIC, emphasized the importance of financial institutions promptly addressing issues when their systems fail customers: “If systems have let customers down, we expect all financial institutions, especially our banks, to act quickly to reduce consumer harm.”

In response to the penalty, NAB has refunded over $8.3 million AUD to the account holders who were unlawfully charged. The bank acknowledged the mistake, stating that “some customers were incorrectly charged for periodical payment fees several years ago,” as reported by Reuters.

This incident follows a previous lawsuit by ASIC against NAB in 2021, where the bank was accused of overcharging customers for misplaced fees. ASIC alleged that NAB wrongly deducted funds from accounts between 2015 and 2019.