National Australia Bank has potentially committed more than 100 criminal offences over charging hundreds of thousands of customers fees without providing a service.
The corporate regulator is investigating “suspected offending” by NAB as part of the wider fees-for-no-service scandal across the financial services industry, documents before the banking royal commission reveal.
NAB denies committing any criminal acts.
In the documents about the fees-for-no-service issues, the Australian Securities and Investments Commission accused the bank of failing to report significant breaches of its licence on time on 110 occasions.
Failing to comply with breach reporting requirements is a criminal offence, although the regulator can take a range of administrative, civil and criminal actions.
The number of late breach reports was disputed by NAB, which told ASIC in May it identified 84 significant breaches reported outside the required 10-day time frame.
In the documents, ASIC also said it was concerned NAB contravened sections of the Corporations Act and ASIC Act – some of which may carry criminal as well as civil penalties – over the issue of fees wrongly charged to superannuation members.
NAB CEO Andrew Thorburn apologised to customers via Twitter over the revelations at this week’s royal commission hearing, which include the bank charging more than 4000 dead superannuation customers $3 million in fees.
In an email to all staff on Thursday, Mr Thorburn said: “We do not believe that we have committed any criminal acts”.
NAB’s superannuation trustee NULIS is paying $120 million to compensate about 300,000 customers charged a plan service fee for general advice services when they had no adviser linked to their account.
The royal commission documents show ASIC may still take action despite the compensation program.
“As we have said, ASIC does not consider remediation to be the only regulatory action required to address the conduct that has resulted in harm to the plan service fees members,” it said in a letter to NAB and NULIS in June.
Other documents tendered at the inquiry showed ASIC believed NAB was out of step with some of its major peers over fees-for-no-service remediation.
Commissioner Kenneth Hayne QC on Thursday rejected NAB’s request to suppress all or part of seven documents related to the extent of it charging fees for no service and its approach to compensating customers.
He said while it would be in NAB’s interests to pay the least sum available by way of mediation, it would be in the interests of customers charged fees for no service to be provided with adequate compensation.
Senior counsel assisting the commission Michael Hodge QC criticised NAB for producing more than 3000 documents to the inquiry last week.