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Company News

Australia's NAB admits to misleading clients in second 'fees for no service' case

SYDNEY, Oct 7 (Reuters) - National Australia Bank, the country’s third largest lender, has admitted to misleading customers more than a thousand times in a lawsuit accusing its financial planners of charging fees for no service, according to court documents.

According to an Oct. 2 document on agreed statements of facts and admissions filed with the Federal Court, the bank admitted to some but not all of the accusations levelled at it by the Australian Securities and Investments Commission (ASIC).

NAB clients received written statements that contained service representations that were “misleading or deceptive or likely to mislead or deceive” on 1,485 occasions, the document said.

On another 225 occasions, the bank failed to provide clients with fee disclosure statements in a timely manner as required by law, it also said.

In December 2019, the regulator accused NAB of 8,927 cases of fees for no service and 3,420 instances of unconscionable conduct. ASIC said the fees were even charged to customers during 2018 Royal Commission hearings into misconduct in the financial sector, at which the bank’s executives defended the practice.

The bank declined to comment on the case - the second ‘fees for no service’ case brought against it by ASIC. Last month, Australia’s federal court fined pension funds run by NAB A$57.5 million ($41 million) for charging fees with no service to thousands of retirees.

The bank began implementing a program in December 2018 to refund financial planning clients who had paid fees but not received the required service, the court document said.

Other Australian banks have also been accused of charging fees for no service. Both Commonwealth Bank of Australia and Westpac Banking Corp have said this year they did not intend to defend themselves in similar cases brought by ASIC.

$1 = 1.4023 Australian dollars Reporting by Paulina Duran; Editing by Edwina Gibbs

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