- Banking giant NAB will pay out nearly A$50 million to customers after it settled a Federal class action suit today
- In the fallout of the Royal Banking Commission inquisition, tactics described as “misleading and deceptive” were used in collecting profits from selling ‘junk’ policies to Australians
- Some of these Australians were pensioners, casual workers, unemployed, and critically ill people, who were unable to claim or take benefits on the “worthless” insurance policies
- NAB and its subsidiary MLC Limited may be dishing out the compensation fees in time for Christmas — however, no financial decision has been reached yet
- Shares in NAB have fallen 2.79 per cent today — priced at $26.50 each
Banking goliath NAB will pay out nearly A$50 million to customers who were sold ‘junk’ insurance on credit card and personal loan policies.
The class-action suit settled today in Federal Court was first launched in 2018, following the Royal Banking Commission inquisition.
NAB and its subsidiary, MLC Limited, made an effort to settle the class-action — resulting in today’s result.
Today’s decision is a landmark verdict, representing the first class action to be settled against one of the big four banks following the Royal Commission.
How much NAB and MLC will be ordered to pay out to customers has not been announced yet. Reports indicate this number could be settled by Christmas.
In addition to the decision, Justice Michael Lee ordered NAB to provide contact detailed of affected customers by December 2nd.
‘Junk’ policies are understood to be basic or cheap policies that provide low-level coverage to customers.
In a statement released following the verdict, NAB Chief Legal and Commercial Counsel Sharon Cook said the settlement was the right thing to do for customers and shareholders.
“As we have said, we can only move forward if we deal with the past, so that we can earn trust among customers and the broader community and grow confidence in the future of NAB,” Sharon explained.
“It is important to note NAB no longer sells CCI products through any of its banking channels and has implemented a remediation program for CCI customers,” she concluded.
The class-action suit was captained by legal firm Slater and Gordon. At the time of its inception, nearly half a million NAB consumers were told by the Federal Court they could be eligible for the case.
“NAB knows that using pushy tactics and pressuring vulnerable customers into buying worthless insurance was wrong,” Slater and Gordon Practice Group Leader Andrew Paull said earlier this year in August.
“They did it anyway and collected millions of dollars in unwarranted premiums in the process.”
Since then, NAB had taken advantage of pensioners, casual workers, unemployed, and critically ill people, who were unable to claim or take benefits on the policies.
The legal claims brought attention to NAB reportedly practising “misleading and deceptive conduct” while peddling the insurance packages.
Shares in NAB have fallen 2.79 per cent today — priced at $26.50 each.