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A new class action alleges NAB charged 330,000 customers excessive fees and commissions years after it was meant to stop
NAB is facing a new class action alleging it mismanaged some $6.8 billion in superannuation for its members.
Maurice Blackburn, the law firm filing the action, alleges NAB Group subsidiaries MLC and Nulis "delayed the compulsory transition of super into low-fee accounts and as a result extracted higher fees and commissions".
In hampering members' super perforamnce, the law firm claims the bank did not act in the best interest of members, instead prioritising NAB Group and financial advisers.
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The fallout from the Hayne Royal Commission continues.
On Wednesday, Maurice Blackburn announced it is filing a class action against NAB for mishandling $6.8 billion of superannuation. Specifically, the law firm alleges NAB subsidiaries MLC and Nulis failed to transition 330,000 members' super into no-frills accounts in a timely fashion, charging them excessive fees instead.
"Because of the delay, default members with “accrued default amounts” paid higher fees and commissions and received a lower investment return for an extended period of time," the law firm said in a statement.
Under 2012 legislation, funds were required to stop charging members financial advice, and move default super into low-fee MySuper accounts. Super funds had until June 2014 to complete the transfer but NAB was found by the financial services royal commission to have failed to make the move until 2017.
Instead of moving this money into new MySuper accounts members were kept in the big bank's Personal Super and MasterKey Business Super accounts. In this way, NAB Group continued to extract fees and commissions for three years more than allowed under the legislation.
The class action is just another headache for newly-appointed CEO Ross McEwan, who was brought in following a disastrous couple of years to overhaul the bank. McEwan and chairman Philip Chronican have replaced the now-departed former CEO Andrew Thorburn and chairman Ken Henry. They acknowledged NAB's failings at their first AMG, faced with a fresh ASIC scandal, with Chronican saying at the time, "NAB has lost a lot of trust and significant changes need to be made… we are determined not to let you down again."
Of course, even this case is not a surprise.
Royal Commissioner Kenneth Hayne noted during the commission's hearings that MLC Nominees and Nulis "did not move with all deliberate speed … for fear of how advisers would react to the loss of commissions" they would receive otherwise. According to Maurice Blackburn on Wednesday, Hayne's conclusion demonstrated the trustees in charge of the super funds prioritised the interest of NAB Group, and financial advisers, above the interests of fund members – in contravention of trustees responsibilities.
"As at 1 pm today, NULIS and MLC Nominees have not yet been served with a statement of claim. NULIS and MLC Nominees will consider carefully any allegations when we receive the claim," a NAB spokesperson told Business Insider Australia.
