Law firm Slater and Gordon commenced the proceedings against NAB and MLC in the Federal Court in September last year, for the group’s sale of two consumer credit insurance (CCI) products, NAB Credit Card Cover and NAB Personal Loan Cover.
The claim was based upon allegations that NAB and MLC engaged in unconscionable conduct by selling CCI to individuals who were ineligible to claim under the terms of or unlikely to be benefit from insurance policy.
NAB was also said to engage in misleading and deceptive conduct in the way CCI was sold.
The $49.5 million payment, which is subject to Federal Court approval, was provided for in NAB’s 2019 full-year results.
NAB chief legal and commercial counsel Sharon Cook said the settlement was the right thing to do for the bank’s customers and shareholders.
“As we have said, we can only move forward if we deal with the past, so that we can earn trust among customers and the broader community and grow confidence in the future of NAB,” Ms Cook said.
“It is important to note NAB no longer sells CCI products through any of its banking channels, and has implemented a remediation program for CCI products.”
Pending the court’s approval, settlement payments to any individual class members will be managed and determined by Slater and Gordon.
In July, ASIC published a report on the sale of CCI products, deeming them as “extremely poor value for money,” with sales practices that cause consumers harm.
The regulator’s work on CCI had already led to a remediation program expected to exceed more than $100 million paid to more than 300,000 affected customers.
An ASIC review into the sale of CCI by lenders pushed Allianz to refund more than $8 million in CCI premiums and fees in August. The insurer stopped issuing new CCI policies from the end of September.
