Tens of thousands of National Australia Bank customers allegedly sold ‘junk’ credit card and personal loan insurance woke up $45million richer today.
More than 45,000 Australians – mainly students, pensioners and insecure workers – received their share of a $49.5million settlement against NAB and its subsidiary MLC Limited after a lengthy class action suit, first launched in September 2018.
Slater and Gordon led the suit on behalf of customers sold worthless insurance. It is one of four class actions in its Get Your Insurance Back campaign.
Other banks Slater and Gordon has filed class actions in the Federal Court against include CommBank, ANZ and Westpac for selling junk consumer credit insurance.
Slater and Gordon confirmed those sold worthless insurance in the NAB case included people with disabilities, suffering from a chronic illness, unemployed or ineligible to claim.
More than 45,000 Australians received their share of a $49.5million settlement against NAB and its subsidiary MLC Limited after a lengthy class action suit
Many of the victims believed the insurance was compulsory or free, with some not even knowing they had it, the firm said.
Slater and Gordon senior associate David Barda said the highest amount received was $36,000, with the average between $1000 and $2000.
About 5000 class action members are still yet to receive their share of the remaining $4.9million in compensation, and will do so in coming days.
‘There are a variety of administrative reasons why the remaining few thousands will get their compensation in a second round. This could be things like bank details being incorrectly filled out, bank accounts closing etc, and the transaction being declined on the receiver’s end,’ he said.
‘Slater and Gordon will be going through processes in the coming months to ensure the compensation finds its way to its owners.’
Mr Barda added it was the first compensation to come out of the Banking Royal Commission, which came at a critical time for many Australians, having lost jobs or experiencing hardship due to COVID-19.
‘We are pleased we can finally mark the end of this class action against NAB with a positive result for tens’ of thousands of Australians who will today wake up with a bit of extra money in their bank accounts,’ Mr Barda said.
‘It goes to show how important class actions are for everyday people who may not have had the means to take on big business – or have their voices heard – on their own.’
Justice Lee of the Federal Court approved the settlement with NAB and MLC Limited, and payments starting from July 9, on May 8.
‘Class actions are often the only way people have the means through which to take on big business when they have been hurt or ripped off; the NAB class action has meant almost 50,000 people have today received what was rightfully owed to them, without having to do much more than fill out a couple of short forms,’ Mr Barda said.
Slater and Gordon senior associate David Barda said the highest amount received was $36,000, with the average between $1000 and $2000
‘The members of the class action haven’t had to battle through court, or take on huge financial risk, and have still been vindicated at the end of the day.
‘Anyone who believes they may have been ripped off by their bank are urged to sign up to the class action.’
In a statement in May, NAB Chief Legal and Commercial Counsel, Sharon Cook, said: ‘We are pleased with the Federal Court’s decision and to be able to resolve this matter for our customers and shareholders.
‘As we have acknowledged, it is important to resolve past issues so that we can rebuild trust with our customers and the community.’
The settlement comes less than six months after NAB being named the least trusted bank in the country on the back of the explosive banking royal commission report.
National Australia Bank’s level of distrust skyrocketed from 36.9 per cent before the report earlier this year was released to 53.7 per cent after the final findings were announced
Daily Mail Australia reported in February Australia’s major four banks were savaged by Commissioner Kenneth Hayne and have suffered a severe decline in their Net Trust Score (NTS) as a result.
NAB was the hardest hit of the four according to the at-the-time latest Roy Morgan NTS survey, which had measured the trust of banks since 2017 and conducted research about the implications of the report.
Roy Morgan conducted a survey in January before the report went public and another in the week after the report was released.
Commonwealth Bank was at the bottom of the index in January, recording the lowest level of trust and highest level of distrust.
NAB quickly claimed the spot following the release of Hayne’s damning report.
Their level of distrust skyrocketed from 36.9 per cent before the report was released to 53.7 per cent after the final findings were announced.
Their level of trust also declined from 18.5 per cent to 11.5 per cent, receiving the banking sector’s worst Net Trust Score of -42.2 per cent.
‘This is the highest level of distrust we have ever seen for a bank brand in Australia,’ Roy Morgan CEO Michele Levine said.
The other three major banks had NTS scores in the minus 20s.
Ms Levine said the results were startling and questioned the future of the banks amid the wariness.
‘This low level of trust sets a new benchmark for Australia’s banks. The real question is what happens next,’ she said.
‘Without trust there is no civil society. The Australian population has now expressed their anger and distrust with Australian banks. It is now time to rebuild that trust.
Ms Levine added the Australian public deserved a strong and trustworthy banking system.
‘Company directors of these banks are facing the biggest challenge of their careers – to reverse the soaring levels of distrust in their brands,’ she said.
‘These directors on the boards of banks need truly independent reporting over time of their brand’s trust – and more critically, their distrust.
‘Rather than taking solace in the relatively strong levels of satisfaction that the banks still enjoy among their main customers, company directors need to explore the dangerous underbelly of distrust.’
The settlement comes less than six months after NAB being named the least trusted bank in the country on the back of the explosive banking royal commission report