If 220,000 customers were collectively charged $34.7 million for financial advice, you'd expect at least one of them to receive said advice, right? That's not what NAB thinks, as between 2012 and 2016, nearly $35 million in planned service charges were added to the superannuation accounts of 220,000 NAB members, according to an Australian Securities and Investments Commission (ASIC) media release from February 2.
Affected members were charged for advice when there was no appointed advisor. Phantom fees such as this are an industry-wide problem. It's not just about advice that never comes, but also about being billed for a lack of account activity, as reported by The New Daily in a February 2 article.
What does that say about the big banks?
Phantom fees such as this are an industry-wide problem.
This sort of activity has been going on for at least the last five years, if not longer. Banks like NAB and CommBank have come under fire for charging too much for the forceful opening of new accounts, or for a service that is never even provided in the first place.
Garry Mulcahy, acting general manager of wealth products for NAB, claims the bank was simply trying to do the right thing for the customers by changing their account strategies. In his eyes, the only problem was the way they went about executing the changes – not that customers were charged $35 million without being informed.
"Our intention with the proactive restructuring of our corporate super products and the upgrade of insurance products was to do the right thing by our customers, and we did provide equivalent or better outcomes for customers. However, we didn't execute the change well and we're sorry to those customers affected."
As punishment for the discrepancy, stricter regulations have been imposed on superannuation products by ASIC, and NAB will be audited to review the risk management and compliance procedures that supposedly caused this debacle.
Choose a customer-owned bank, and avoid this bad news
Are you sick of hearing about things like this from your bank? It can be tiring keeping up with all of the news about malpractice, but there is another option. Join a friendly customer-owned bank like CAPE, and you won't hear about the bad news from within. You'll likely still hear about the big banks, but you won't be a part of their dealings anymore.
For more information about switching to CAPE, get in touch with one of our representatives today.