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NAB super entities hit by $57.5 million court penalties
National Australia Bank’s (NAB's) NULIS Nominees and MLC Nominees have been ordered to pay a total of $57.5 million in penalties for having made false and misleading representations to superannuation fund members.
The Australian Securities and Investments Commission (ASIC) said the Federal Court of Australia had ordered the two entities (MLC Nominees) to pay the monies for having made false and misleading representations to superannuation members about their entitlement to charge plan service fees and members’ obligations to pay the fees.
It said the Court also made declarations that MLC Nominees and NULIS failed to ensure that their financial services were provided efficiently, honestly and fairly.
MLC Nominees will pay a total penalty of $49.5 million for its contraventions, while NULIS will pay a penalty of $8 million for its contraventions.
ASIC said that the Court had found that between 8 September 2012 and 30 June 2016, MLC Nominees misled members in the MasterKey Product and deducted approximately $33.6 million in Plan Service Fees from approximately 220,000 members of MasterKey Business Super (MKBS) and MasterKey Personal Super (MKPS), divisions of the MasterKey Product, who did not have a Plan Adviser.
Between 8 September 2012 and 30 September 2018, MLC Nominees and NULIS misled members and deducted approximately $71.9m Plan Service Fees from approximately 457,000 members of MasterKey Personal Super linked to Plan Advisers where Plan Advisers were not required to provide services and members did not receive services or any services they could not otherwise obtain for free.
The Federal Court made declarations to the effect that NULIS and MLC Nominees breached the ASIC Act for misleading and deceptive conduct and by making false or misleading representations, for which the civil penalties have been ordered.
The Court also made declarations that NULIS and MLC Nominees breached the Corporations Act by failing to ensure that the financial services were provided efficiently, honestly and fairly, whereby Yates J said the contravening conduct was represented by MLC Nominees’ and NULIS’ failure to inform members that, when they transferred from MKBS to MKPS, they could “turn off” their plan service fee; its failure to exercise its own right, as trustee, to terminate the plan service fee of members who had transferred from MKBS to MKPS; and the fact that it made or authorised the making of monthly deductions from the accounts . Other declarations related to failing to comply with the financial services laws, for misleading and deceptive conduct and for issuing a defective Product Disclosure Statement. The Court also ordered that the defendants’ pay ASIC’s costs of the proceedings.
In his decision, Justice Yates described NULIS and MLC Nominees’ contraventions of s12DB of the ASIC Act as “very serious” and, in determining the amount of penalties to impose, found it was appropriate to consider the very large scale of the business within the MLC Wealth segment of the NAB Group in which NULIS and MLC Nominees operated.
ASIC acknowledges that MLC Nominees and NULIS made admissions of liability during the proceedings and notes that this cooperation was taken into account by Justice Yates in determining the penalty.
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Hi Mike, I read the Article in relation to MLC and Nulis Norminees. I had an account with MLC that I was not aware of, from 2004 to 2018. I had filed a complaint with AFCA, and basically didnt get anywhere with my case. MLC had taken exorbitany fees and charges totalling colse to 10k from my supperfund. The high premiums and fees were diducted from my account. As I was a hard working mother, and trying to raise a family and trying provide for the family, somewhat didnt realise, that this account with MLC even existed. If I had know about this account I would have invested elsewhere. I am devestated with the outcome from AFCA, and wondering is there any wherelse I can go to. I have no leg to stand fighting a big organisation such as MLC, therfore if you can give some advice what my options are, I would really appreciate.
King regard,
Sharon Henry