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.
This marks the first time ASIC has brought proceedings for the contravention of section 31(1) of the National Consumer Credit Protection Act 2009.
According to ASIC Deputy Chair Daniel Crennan QC, the penalty imposed today is intended to not only reflect the severity of NAB's misconduct, but is “an important result” for ASIC’s first civil action alleging contraventions of s31(1) of the National Credit Act.
However, the Court did acknowledge that it took into account NAB’s cooperation with ASIC and admissions of contravention of the law in arriving at the penalty to be imposed.
Background
From 2000 to 2019, NAB operated the credit industry’s largest referral program, known as the ‘Introducer Program’, whereby a third-party Introducer could ‘spot and refer’ a potential customer to NAB in exchange for a commission if the customer entered into a loan with NAB.
Introducers referring customers through the program were only meant to provide NAB with the potential customer’s name, contact details and a short description of the purpose for which the customers were seeking credit.
However, ASIC’s investigation uncovered that NAB bankers overstepped by accepting information and documentation from the 25 unlicenced introducers, including completed home loan applications, payslips, copies of customer identification documents and more. Further, ASIC identified that some of the documents provided to NAB were false.
On 1 October 2019, NAB terminated its Introducer Program.
In addition to ASIC’s case against NAB, the regulator has also taken action against four individuals involved in the misconduct; former NAB employees Danny Merheb and Samar Merjan have been permanently banned from engaging in credit activities and providing financial services, while former branch manager Rabih Awad is banned from engaging in credit activities and providing financial services for seven years.
Another former NAB branch manager, Mathew Alwan, was also permanently banned in addition to being sentenced to 12-months’ imprisonment to be served as an Intensive Corrections Order.
