NAB gets away with ‘woefully insufficient’ $2.1m fine

afr.com:

The $2.1 million fine levied against National Australia Bank for overcharging about 5700 customers with account fees is “woefully insufficient”, a Federal Court judge says.

The penalty, imposed by the court on Friday, comes 11 months after the bank was found to have engaged in “unconscionable conduct”, following an Australian Securities and Investment Commission investigation that alleged NAB overcharged users $365,454 on periodic payments from 2015 to 2019.

NAB apologised to customers and said it had conducted an $8.3 million remediation program. Bloomberg

Justice Roger Derrington said the bank had “unjustifiably advanced its self-interest whilst knowing that its customers were oblivious to the wrongful charging”. He added NAB “deliberately and cynically took advantage” of its customers and allowed “the overcharging to continue whilst it searched, admittedly in good faith, but without any great diligence, for a solution”.

But Justice Derrington could only impose a $2.1 million fine on the major bank, despite concerns around the deficient controls that led to the overcharging and the culture that allowed it.

“Those observations may indicate some likelihood that similar problems will surface in the future,” Justice Derrington said. “This factor accordingly serves to justify the imposition of the maximum available penalty, though it simultaneously suggests that this maximum is woefully insufficient.”

He did, however, take “some solace” in the fact that the government had overhauled the penalty regime since the time of the unconscionable conduct under the relevant laws to extend the maximum fine in cases such as this one.

While NAB’s terms of service indicate customers were charged $1.80 for periodic transfers to another