Australian financial regulator has filed a lawsuit against National Australia Bank (NAB) in relation to the lender’s ‘Introducer’ programme.
In Introducer programme, third parties referred details of potential customers against a commission from the bank.
However, the law required NAB to procure such information only from authorised personnel with Australian credit licence (ACL).
In the lawsuit, the Australian Securities and Investments Commission (ASIC) alleged that NAB accepted information for consumer loans from unauthorised third parties breaching multiple credit regulations.
NAB accepted information from 25 unlicensed introducers for 297 loans between September 2013 and July 2016, ASIC said.
“This behaviour can pose a serious risk to consumers, as ASIC also identified that in some instances the documents provided to NAB by the unlicensed introducers were false,” the regulator noted.
According to ASIC, NAB’s Introducer generated A$24bn worth of loans in the period 2013-2016.
During the Royal Commission, which investigated misconduct in Australian banking industry, NAB accepted that the failure remained undetected till 2015.
For the failures, the regulator urged the court to impose a civil penalty on NAB.
In a statement, NAB acknowledged the commencement of civil proceedings.
NAB chief legal and commercial counsel Sharon Cook said: “We take this legal action seriously and will now carefully assess the allegations.
In March, the bank announced that it will close the Introducer programme on 1 October 2019.
Cook added: “We also established a remediation program in November 2017 to assist impacted customers.”
In July, ASIC sued Australia and New Zealand Banking Group (ANZ) for levying certain illegal fees on customers.