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National Australia Bank (NAB) is facing a shareholder class action over the sale of credit card insurance to ineligible customers.
The case, filed by Slater and Gordon in the Federal Court, alleged NAB and its MLC subsidiary engaged in unconscionable act, in breach of the 2001 ASIC Act, by selling credit card insurance to students, unemployed people, and welfare recipients, who were all ineligible to claim the main benefits under the policy.
In a statement, Andrew Paull, Slater and Gordon class actions principal lawyer, said that “in the case of the life cover, the policy was of minimal value to many customers.” The major bank “admitted as much in the royal commission,” Australian Associated Press reported.
Paull said NAB pocketed millions of dollars in premiums from policies it knew were of little or no benefit to “hundreds, potentially thousands of their loyal customers.”
The class action is open to anyone who held a policy within the past six years.
NAB’s consumer and wealth boss, Andrew Hagger, recently announced that he was stepping down from his role, as the bank continues to grapple with allegations of misconduct exposed by the royal commission.
NAB is spinning off the MLC wealth unit, with former NSW Premier Mike Baird taking the lead in restoring the retail business’ tarnished reputation, AAP said.
