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Regulator starts court action against NAB over super charges for no service Regulator sues NAB for no-service scandal as industry faces $1bn bill
(35 minutes later)
The corporate regulator has launched court action against the National Australia Bank in the start of a possible $1bn blitz against the financial services industry for the fees-for-no-service scandal. The corporate regulator has launched court action against the National Australia Bank over the fees-for-no-service scandal in the start of a legal onslaught that could cost the financial services industry up to $1bn.
The Australian Securities and Investments Commission on Thursday said it was seeking a civil penalty under the federal court action against NAB superannuation trustees Nulis and MLC Nominees.The Australian Securities and Investments Commission on Thursday said it was seeking a civil penalty under the federal court action against NAB superannuation trustees Nulis and MLC Nominees.
The banking royal commission last month heard that a super trustee deducted fees from deceased members’ accounts “for a period” and prior hearings exposed similar scandals in the area of financial advice.The banking royal commission last month heard that a super trustee deducted fees from deceased members’ accounts “for a period” and prior hearings exposed similar scandals in the area of financial advice.
It is the first court action Asic has launched over the scandal that is expected to lead to as much as $1bn being repaid to customers. It is the first court action Asic has launched over the scandal that is expected to lead to as much as $1bn being repaid to customers.
NAB has already agreed to pay more than $100m in compensation to super customers charged a plan service fee for general advice when they did not have an adviser linked to their account.NAB has already agreed to pay more than $100m in compensation to super customers charged a plan service fee for general advice when they did not have an adviser linked to their account.
In May, the royal commission heard that a Commonwealth Bank of Australia subsidiary, Count Financial, continued charging clients fees after they died – in one case for more than a decade.
ASIC's court action alleges NULIS and MLC Nominees, as NAB's current and former superannuation trustee, misled members of MLC MasterKey Super products.ASIC's court action alleges NULIS and MLC Nominees, as NAB's current and former superannuation trustee, misled members of MLC MasterKey Super products.
In a statement on Thursday, it alleged the trustees deducted $33m in plan service fees from 220,000 members of MLC MasterKey Business and MLC MasterKey Personal Super who did not have a plan adviser.In a statement on Thursday, it alleged the trustees deducted $33m in plan service fees from 220,000 members of MLC MasterKey Business and MLC MasterKey Personal Super who did not have a plan adviser.
It said NAB also deducted $67m in plan service fees from 300,000 members of MLC MasterKey Personal Super where plan advisers were not required to provide services and members did not receive services or any services they could not otherwise obtain for free. It said NAB also deducted $67m in plan service fees from 300,000 members of MLC MasterKey Personal Super where plan advisers were not required to provide services and members did not receive services or any services they could not otherwise obtain for free.
Asic said the commencement of the civil penalty action was part of its investigations into fees-for-no-service failures in the financial services industry.Asic said the commencement of the civil penalty action was part of its investigations into fees-for-no-service failures in the financial services industry.
NAB was grilled about the fees-for-no-service issue during the banking royal commission's superannuation hearing last month.
After paying $34.7 million in remediation last year, NAB is now dumping the plan service fee with NULIS to pay another $87 million in refunds and compensation to 205,000 current Masterkey personal super members.After paying $34.7 million in remediation last year, NAB is now dumping the plan service fee with NULIS to pay another $87 million in refunds and compensation to 205,000 current Masterkey personal super members.
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