National Australia Bank (NAB) has been ordered to pay a $15 million civil penalty as the Australian Securities and Investments Commission (ASIC) has broken new ground by successfully prosecuting the use of introducers.
ASIC announced today that the Federal Court of Australia had ordered National Australia Bank (NAB) pay a civil penalty in the amount of $15 million for contravening section 31(1) of the National Consumer Credit Protection Act 2009 (National Credit Act) with respect to so-called introducers.
ASIC stressed that this marked the first time ASIC had brought proceedings for contravening s31(1) of the National Credit Act, which prohibits credit licensees from conducting business with persons engaging in credit activity without an Australian credit licence (ACL).
It said the court also declared that NAB breached the National Credit Act 260 times by engaging in a credit activity with ‘introducers’ who did not have an ACL and were engaging in a credit activity, namely by assisting NAB customers enter into home loans.
ASIC’s investigation revealed that between 3 September, 2013 and 29 July, 2016, 16 NAB bankers accepted information and documents in support of at least 260 consumer loan applications from 25 third party introducers who were not licensed to engage in credit activity.
Commenting on the outcome, ASIC deputy chair, Daniel Crennan QC said: “The penalty imposed by the court reflects the serious contraventions by NAB and is an important result for ASIC’s first civil action alleging contraventions of s31(1) of the National Credit Act.
“In arriving at the penalty to be imposed, the court took into account NAB’s cooperation with ASIC and admissions of contravention of the law.”
