NAB calls ASIC ‘a model litigant’ in fees-for-no-service case

At the house committee hearings into the four major banks, NAB group chief executive Philip Chronican was questioned by deputy chair Matt Thistlethwaite around how the bank is being prosecuted under the Corporations Act 2001 by ASIC.

Mr Thistlethwaite said that based on the commentary he’s read, NAB has been filing defences saying that its behaviour is “flawed but not illegal”, and that “offering customers advice is just as good as providing it”.

“Is that still the position that NAB has on that defence or has that been changed?” Mr Thistlethwaite asked.

“The case is actually going into mediation, so it’s hard for me to comment on something which is going through the court process, but I believe that actually the contracts and the product that we’re talking about in the case, the offer of advice was what was actually promised. As I said, we have to work that one through and we’re in the middle of a court case with ASIC on it,” Mr Chronican responded.

Mr Thistlethwaite asked Mr Chronican of the distinction between customers who were either linked or unlinked to an adviser.

He responded that NAB has refunded both categories of customers, but that its behaviour is not illegal.

Mr Thistlethwaite then questioned that if NAB refunded the money, then implicitly it has recognised that it’s done the wrong thing.

“Doesn’t that make it illegal?” he said.

“I think there’s a big difference between giving customers their money bank and accepting that something is illegal. We refund customers fees and charges often even when we’re perfectly entitled to collect them,” Mr Chronican replied.

Now that the case between NAB and ASIC has entered mediation, Mr Thistlethwaite asked why the corporate regulator agreed to mediation, and why they didn’t just prosecute them.

“[It’s] a court-ordered mediation. And they’re a model litigant,” answered Mr Chronican.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].