Get all your news in one place.
100’s of premium titles.
One app.
Start reading
AAP
AAP
Politics
Derek Rose

NAB blasted for incorrect customer fees

The Federal Court has found NAB took advantage of its customers and acted in its own self interest. (Joel Carrett/AAP PHOTOS) (AAP)

Nearly 6,000 National Australia Bank customers were charged incorrect fees for several years even though the bank was aware of the problem, the Federal Court has found.

The Federal Court ruled that NAB engaged in "unconscionable conduct" over the periodic payment fees, following a lawsuit brought by the Australian Securities and Investments Commission.

The bank took advantage of the customers' continuing lack of knowledge, and acted in its own self-interest by continuing to operate a system which it knew wrongfully deducted sums from its customers' accounts," Justice Roger Derrington ruled on Monday.

The fees in question were not large, either $1.80 or $5.30.

But Justice Derrington ruled that customers were overcharged on more than 1.6 million transactions between 20 July 2007 and 22 February 2019.

The bank overcharged 4,874 personal banking customers and 913 business customers a total of $365,454 in fees for monthly automated payments.

The overcharging was apparently the result of human error when the automated payments were set up by NAB staff. Some customers were entitled to an exemption but did not receive one, and others were charged a fee of $5.30 when the correct fee was $1.80.

ASIC deputy chairwoman Sarah Court blasted the bank's conduct.

"The continued charging of incorrect fees to customers when NAB knew it was occurring ...demonstrated that NAB was promoting its own interests over those of its customers," the corporate regulator said.

"Disappointingly, it took NAB over two years to switch off the periodic payment fees after becoming aware of the issue."

NAB's media division has been contacted for comment.

The bank stopped charging periodic payment fees to customers in 2019 and has already paid $8.3 million in remediation to customers who incurred these fees since 2001.

The matter will return to court at a later date.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.