ASIC is to sue National Australia Bank (NAB) after alleging that they charged customers beyond their contractual limits over a period of four years.
The financial regulator also alleges that NAB engaged in unconscionable conduct by continuing to charge customers after it had realised that the overcharging had occurred.
The initial period overcharging was between 25 February 2015 and 22 February 2019, when NAB charged for periodic payments almost 200,00 times in manner that went further than their contractual entitlements.
According to ASIC, this occurred almost 200,000 times, resulting in 4,874 personal banking customers and 913 business banking customers being overcharged to the tune of $365,454 collectively.
ASIC allege that, as customers were informed of the charges, this also constitutes false or misleading representation, deceptive conduct and non-compliance with the terms of NAB’s Australian financial services license.
NAB themselves identified that they were charging undue fees by the end of October 2016, but it took them almost two years, until July 2018, to inform their customers and ASIC of their error, and to begin repayment of the fees.
Due to this gap, ASIC have lodged a charge that NAB engaged in unconscionable conduct and contravention of regulations by failing to stop the overcharging, having insufficient systems in place to avoid overcharging and by failing to inform their customers of the issue.
By imposing periodic payment fees on customers when it had no contractual entitlement to do so, NAB also stand accused of failing to provide financial services efficiently, honestly and fairly for the entire period between February 2015 and February 2019.
As part of the same allegation, ASIC has also said that NAB failed to ensure that periodic overcharging did not occur, did not detect the overcharging when it was occurring and failed to identify and recompense affected customers, all of which breach the terms of their license from the Australian financial regulator.
The date of a court hearing is yet to be determined.