The mistake that took NAB two years to fix and cost its customers more than $365,000
Thousands of National Australia Bank customers were overcharged incorrect fees for several years even though the bank was aware of the problem.
NAB knew of the incorrect payments for two years before fixing the issue, the Federal Court heard.
The Federal Court has found NAB engaged in “unconscionable conduct” over the period payment fees.
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.
