National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA) have been charged of criminal offences by the banking royal commission over their treatment of superannuation customers.
The commission has been told it is open to find that NAB engaged in alleged misconduct for numerous examples of charging customers fees for no service, for charging fees to dead customers and for grandfathering commissions inappropriately.
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NAB was rebuked for withholding information from the Australian Securities and Investments Commission (Asic) about the scale of its fee-for-no-service issues.
The senior counsel assisting the commission Michael Hodge said that CBA knowingly flouted superannuation laws by failing to transfer 13,000 of its superannuation clients to low fee accounts dubbed My Super before the 1 Jan 2014 deadline.
Hodge also accused NAB’s superannuation unit MLC and its superannuation trustee Nulis of overcharging superannuation clients by failing to tell customers that they do not require to pay a plan service fee.
According to Hodge, NAB admitted breaching the superannuation law 84 times between 2014 and 2017 by failing to inform the Australian Securities and Investments Commission (ASIC) about the fees-for-no-service scandal within the legal deadline.
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By GlobalDataHodge also said that the bank’s executives appearing before the commission lacked insight into the wrongdoings.
“Assessed as a whole, it is submitted that this behaviour indicates a disregard on the part of the NAB Group for members of the relevant superannuation funds, for regulators and for the law,” the findings said.
At the same time, Hodge also criticised ASIC and the banking regulator APRA for being hard on financial institutions violating rules, while pointing out that ASIC is yet to initiate legal action over the fees-for-no-service scandal.
“The approach of neither APRA nor ASIC to regulation of superannuation entities is sufficient to achieve specific or general deterrence,” he noted.
