A law firm says it has filed class action proceedings in Federal Court against NAB over the sale of credit card insurance to ineligible customers.
ASX-listed Slater and Gordon alleges National Australia Bank and its MLC subsidiary engaged in unconscionable conduct, contravening the 2001 ASIC act, by selling insurance to card holders who were ineligible to claim.
Slater and Gordon says the bank sold insurance to students, the unemployed and people on disability pensions, all of whom were ineligible to claim the main benefits under the policy.
“”In the case of the life cover, the policy was of minimal value to many customers,” Slater and Gordon class actions principal lawyer Andrew Paull said in a statement.
“NAB admitted as much in the Royal Commission.”
Mr Paull said NAB received millions of dollars in premiums from policies it knew were of little or no benefit to customers.
“They have taken advantage of hundreds, potentially thousands of their loyal customers,” Mr Paul said.
The class action is open to anyone who held a policy within the past six years.
NAB’s chief legal and commercial counsel, Sharon Cook, says the bank has yet to be served with any legal proceedings but will carefully consider any allegations it receives.
“NAB is committed more than ever to making sure customers come first, always,” Ms Cook said in a statement Thursday.
“We have made changes, and will continue to make changes, to transform our business – to serve customers better and to build trust.”
In March, rival lender Commonwealth Bank agreed to refund $16 million to about 140,000 personal loan and mortgage insurance customers after finding people were sold policies they would not be able to claim on.
The refund came on top of $10 million CBA last year agreed to pay back after credit card insurance was sold to 65,000 students and unemployed people who were ineligible to claim on it.
Consumer and wealth boss Andrew Hagger, who last month was criticised by counsel assisting the royal commission for showing “a disrespect for the role of the regulator and a disregard for the gravity of the events in question”, said this month he was stepping down.
NAB is spinning off the MLC wealth unit and has tasked former NSW Premier Mike Baird with restoring the tarnished reputation of the retail business.