AAP Finance

NAB super providers to pay $57m penalties

By AAP Newswire

Two NAB-owned superannuation businesses have been ordered to pay $57.5 million in penalties after the Federal Court found they misled customers and wrongly charged fees.

MLC Nominees and NULIS Nominees must pay $49.5 million and $8 million respectively for deducting plan service fees from customers, after the corporate regulator ASIC took them to court in 2018.

Between September 2012 and June 2016, MLC charged $33.6 million in plan service fees from about 220,000 customers using MasterKey business and personal superannuation who did not have a plan adviser.

Between September 2012 and September 2018, MLC and NULIS charged $71.9 million in plan service fees from about 457,000 customers using MasterKey personal super linked to plan advisers.

The Financial Services Royal Commission, which examined banks and other companies charging fees for no service, used NULIS as an example in its 2019 final report.

The court found the businesses breached the Corporations Act by failing to ensure the services were provided efficiently, honestly and fairly.

The businesses also failed to tell some customers they could "turn off" the plan service fee, according to the court.

The management of the super providers admitted these failings.

NAB legal and commercial services group executive Sharon Cook said important lessons had been learned.

"Customers should never have been charged for a service that was not received, and NULIS and MLC should have made it clearer that customers could switch off the plan service fee," she said.

The companies paid $117 million to customers in compensation, including interest. These payments were made by May last year.

NAB in 2018 said it would sell the MLC business. Last month wealth manager IOOF Holdings said it will buy it for $1.44 billion.

ASIC last year began legal action against NAB for the alleged charging of fees for no service. Hearing dates have yet to be set.

NAB shares were trading higher by 1.22 per cent to $17.36 at 1537 AEST.