Powered by MOMENTUM MEDIA
subscribe to our newsletter

NAB admits to hundreds of NCCP breaches

The major bank has admitted to breaching the NCCP in more than 85 per cent of the 297 alleged contraventions regarding introducer-originated home loans.

In August, the Australian Securities and Investments Commission commenced proceedings in the Federal Court against NAB over allegations that 16 bankers accepted loan information and documentation from 25 unlicensed introducers in relation to 297 mortgages.

ASIC alleged that between 3 September 2013 and 29 July 2016, NAB accepted information and documents in support of 297 consumer loan applications from third-party introducers who were not licensed to engage in credit activity.

NAB has now confirmed that it has admitted to 255 of the alleged breaches of section 31 of the National Consumer Credit Protections Act.

In admitting the breaches, NAB acknowledged that introducers went beyond their remit to “spot and refer” clients.

Advertisement
Advertisement

Over the course of the banking royal commission, NAB also identified that misconduct within its introducer program went undetected until 2015 for reasons including:

The maximum penalty for one breach of s31(1) of the National Credit Act, during the time of contravention, was 10,000 penalty units, or $1.7 million to $1.8 million.

However, in August, ASIC acknowledged that the maximum penalty under the law was “well beyond” what could be expected to be imposed by a court.

The Federal Court is yet to deliver its judgment.

NAB has since closed its introducer program, with the bank announcing in March that it would not remunerate introducers after 1 October 2019.

PROMOTED CONTENT


In a statement to Mortgage Business, NAB’s chief customer officer for consumer banking, Mike Baird, said: “As we have said previously, the program had inherent risks and ultimately fell short of customer and community expectations.

“We want customers to have the confidence to come to NAB because of the products and services we provide – not because a third party received a payment to recommend us.

“As we announced in March, we have ceased our Introducer Payment Program and we have run a remediation program for impacted customers.”

He concluded: “We have put every effort into remediating our customers and will continue to make changes to earn the trust of our customers and the community.”

[Related: ASIC sues NAB over unlicensed introducers]

 

NAB admits to hundreds of NCCP breaches
mortgagebusiness

If you have ever considered how you could better service your SME clients but lack the knowledge or confidence to do this beyond referring them on, this is a must-attend event for you. Don't miss SME Broker Bootcamp, a jam-packed, free-to-attend, practical workshop. Register today and secure your place at this interactive, flexible, must-attend event.

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The percentage of young adults looking to pay down their home loans has risen over the past five months, according to new data. ...

Despite the Reserve Bank digging its heels in on the timing of its cash rate climb, Westpac economists have predicted the right conditions w...

Customer-owned banks operate around four branches per $1 billion in assets, while the big four collectively run less than one shopfront per ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

When do you expect the cash rate to start increasing?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.