NAB and Bankwest forced to repay customers: ASIC

Stocks and Financial Services Press Releases Monday February 6, 2017 16:57
The Asian Banker--6 Feb--Asian Banker

National Australia Bank has been forced to pay $36.5 million in compensation after the regulator revealed it had ripped off hundreds of thousands of superannuation members and knocked back insurance claims to seriously ill customers.

The Australian Securities and Investments Commission on Thursday revealed the payments as it imposed extra licence conditions on the bank's super trustee in response to "breakdowns" in the bank's internal procedures.

ASIC said NAB wrongly denied nine insurance claims and underpaid one claim for death and total and permanent disability (TPD) cover between 2012 and 2015. It is refunding affected customers $1.8 million.
NAB said it knocked back the claims due to applying the wrong definition of total permanent disability, but would not give any more detail.
ASIC has revealed the bank also overcharged 220,000 corporate superannuation accounts a combined $34.7 million between late 2012 and October last year.

It said members were charged "planned service fees" under two of NAB's MLC super products, which should have given members access to general financial advice. However, the bank failed to provide such advice, the watchdog said.

A spokesperson for the bank apologised to customers and blamed the fee breach on a "restructuring of corporate super products".
"We didn't execute the change well and we're sorry to those customers affected," the spokesperson said.
NAB has commissioned KPMG to conduct a review into the bank's super business. It has not been fined by the corporate regulator.
Pat McConnell, an honorary fellow at Macquarie University Applied Finance Centre, said the significance of the breach and the lack of penalty showed Australia's financial regulators were powerless to the banks.
"Other banks in Canada and elsewhere are fined for these sorts of things," he said.
"NAB is getting a lot of money from people for running their pension funds and they are not doing it to the high level they should be."
David Whiteley, chief executive of Industry Super Australia, said the breach again highlighted the problem of banks controlling super funds.
"It raises the appropriateness and compatibility of the banks' profit driven, vertically integrated model to be involved in compulsory superannuation."

NAB's wealth arm has battled claims of poor risk mismanagement in recent years, with a series of internal reports leaked to Fairfax Media in 2015 showing "red" levels of risk, in part due to the continued discovery of breaches requiring reporting to regulators.

Trouble has also brewed at the bank's foreign exchange desk, with the bank being forced into an enforceable undertaking in December after traders were revealed to have front run orders on personal accounts.

But the bank denied it had a systemic problem. "Systemic is when you consistently don't have the right processes and controls to find those issues, or you hide the issues you find. That's not the case at NAB," the spokesperson said.

The corporate regulator has also revealed Bankwest wrongly calculated $4.9 million in home loan interest for customers with offset accounts, leading to refunds for 10,800 clients.
The breach has meant that some customers who opened accounts between 2007 and 2016 were overcharged interest on their home loans.
Bankwest said it uncovered the problem and reported it to ASIC in March 2014.

"Where there is evidence that an offset was requested, Bankwest has notified customers, linked the relevant accounts and refunded any interest which had been overpaid," Bankwest executive general manager of retail Andrew Whitechurch said.

An offset account is a savings or transaction account linked to a home loan that is designed to reduce the interest on the home loan.
ASIC said the failure represented a significant breach of the bank's licence obligations.
"It is critical that licensees ensure that their systems work properly so that promises made to customers about their bank accounts are kept," ASIC deputy chairman Peter Kell said.
A report from ASIC last October that uncovered widespread short-changing of customers in the banks' wealth divisions. (Feb 06, 2017)-- .

Latest Press Release

SET welcomes restaurant operator Zen Corporation Group on February 20

The Stock Exchange of Thailand (SET) will list Zen Corporation Group pcl – a leading operator of restaurant brands in Thailand – on February 20, under the ticker symbol "ZEN". The company has a market capitalization at its initial public...

Photo Release: EXIM Thailand Holds FX Risk Management Seminar Phase 2 To Promote FX Risk Hedging Tools for SME Exporters in the Northeast

Mr. Chana Boonyachai (center), Executive Vice President of Export-Import Bank of Thailand (EXIM Thailand), recently welcomed Mrs. Thatsanee Tangpattanasiri (right), Director, Northestern Regional Office, Bank of Thailand (BOT), and Mr. Ranon Keowsuddhi...

Frasers Property Thailands Revenue Increased 341% to 2.577 Billion Baht and Net Profit Rose 190% to 684 Million Baht in Q1/2019

Revenue totalled 2.577 billion baht, an increase of 1.993 billion baht or 341% year-on-year, while net profit totalled 684 million baht, a growth of 190% year-on-year. Embarked on a "Total Dimension" strategy to become leading provider of smart...

Photo Release: EXIM Thailand Visits Xayaburi Hydroelectric Power Project

Mr. Nopporn Thepsithar (fifth left), Chairman of the Board of Executive Directors, Export-Import Bank of Thailand (EXIM Thailand) and Dr. Narongchai Akarasanee (center), former Minister of Energy, recently visited Xayaburi Hydroelectric Power Project...

Thailands Promotion of Advanced Technology and Eco-system Development Enables Local Producers to Fly Higher

Thailand has been experiencing a gradual shift from a manufacturing to a high-value manufacturing economy after the country has put all its efforts into promoting the use of advanced technology, science, and innovation in parallel with the development of...

Related Topics