Australian Securities and Investments Commission v National Australia Bank
[2025] FCA 947
•13 August 2025
FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v National Australia Bank [2025] FCA 947
File number(s): VID 1253 of 2024 Judgment of: NESKOVCIN J Date of judgment: 13 August 2025 Catchwords: BANKING AND FINANCIAL INSTITUTIONS – alleged contraventions of s 72(4) of the National Credit Code, being Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth) – failure to provide a written response to hardship notices given by customers within the statutory timeframe under s 72(5) of the Code – admitted contraventions – where parties jointly proposed agreed declarations of contravention, a pecuniary penalty and adverse publicity notice – whether penalty appropriate – respondents ordered to pay a pecuniary penalty of $15.5 million Legislation: Australian Securities and Investments Commission Act 2001 (Cth) ss 12GBCM, 12GLB(1)(a)
Competition and Consumer Act 2010 (Cth) s 76
Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law s 224
Corporations Act 2001 (Cth) ss 1101B(1), 1317QA
Evidence Act 1995 (Cth) s 191
Federal Court of Australia Act 1976 (Cth) s 21, 43
Insurance Contracts Act 1984 (Cth) s 75R
National Consumer Credit Protection Act 2009 (Cth) ss 3, 166, 167, 175A, 182
National Consumer Credit Protection Act 2009 (Cth), Sch 1, National Credit Code ss 72(4), 72(5)
National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) Sch 8, Pt 2, s 3
Treasury Law Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth)
National Credit Protection Bill 2009 (Cth) (Pt 4) [8.2], [8.159]–[8.162]
Cases cited: Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13
Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36
Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2017) 258 FCR 312; [2017] FCAFC 159
Australian Competition and Consumer Commission v Cryosite (2019) 135 ACSR 231; [2019] FCA 116
Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liq) (No 3) [2017] FCA 1018
Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698
Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54
Australian Competition and Consumer Commission v Yazaki Corporation (2018) 262 FCR 243; [2018] FCAFC 73
Australian Securities and Investments Commission v AGM Markets Pty Ltd (In Liq) (No 4) (2020) 148 ACSR 511; [2020] FCA 1499
Australian Securities and Investments Commission v Allianz Australia Insurance Limited [2021] FCA 1062
Australian Securities and Investments Commission v AMP Financial Planning [2022] FCA 1115; (2022) 164 ACSR 64
Australian Securities and Investments Commission v AustralianSuper Pty Ltd [2025] FCA 102
Australian Securities and Investments Commission v Aware Financial Services Australia Ltd [2022] FCA 146
Australian Securities and Investments Commission v Colonial First State Investments Limited [2021] FCA 1268
Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790
Australian Securities and Investments Commission v Commonwealth Bank of Australia (No 2) [2021] FCA 966
Australian Securities and Investments Commission v Membo Finance Pty Ltd (No 2) [2023] FCA 126
Australian Securities and Investments Commission v National Australia Bank Limited [2020] FCA 1494
Australian Securities and Investments Commission v National Australia Bank Limited [2021] FCA 1013
Australian Securities and Investments Commission v National Australia Bank Limited (2022) 164 ACSR 358; [2022] FCA 1324
Australian Securities and Investments Commission v National Australia Bank Limited (No 2) [2023] FCA 1118
Australian Securities and Investments Commission v Noumi Ltd (No 3) [2024] FCA 862
Australian Securities and Investments Commission v Statewide Superannuation Pty Ltd [2021] FCA 1650
Australian Securities and Investments Commission v Vanguard Investments Australia Ltd (No 2) [2024] FCA 1086
Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46
Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39
Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972] HCA 61
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20
SunshineLoans Pty Ltd v Australian Securities and Investments Commission (2025) 308 FCR 474; [2025] FCAFC 34
Trade Practices Commission v TNT Australia Pty Ltd (1995) ATPR 41-375
Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission (2021) 284 FCR 24; [2021] FCAFC 49
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 94 Date of hearing: 13 June 2025 Counsel for the Applicant: J S Graham and F S Shand Solicitor for the Applicant: Maddocks Counsel for the Respondents: D F C Thomas and J Findlay Solicitor for the Respondents: King & Wood Mallesons ORDERS
VID 1253 of 2024 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Applicant
AND: NATIONAL AUSTRALIA BANK LIMITED (ACN 004 044 937)
First Respondent
AFSH NOMINEES PTY LTD ACN 143 937 437
Second Respondent
ORDER MADE BY:
NESKOVCIN J
DATE OF ORDER:
13 AUGUST 2025
In these Orders, the following definitions apply:
(a)AFSH means the Second Respondent, AFSH Nominees Pty Ltd (ACN 143 937 437).
(b)AFSH hardship notice means a hardship notice within the meaning of s 72(1) of the Code received by AFSH, and AFSH hardship notices means the AFSH hardship notices identified in Schedule B of these Orders.
(c)ASIC means the Applicant, the Australian Securities and Investments Commission.
(d)Code means the National Credit Code, being Schedule 1 to the Credit Act.
(e)Credit Act means the National Consumer Credit Protection Act 2009 (Cth).
(f)NAB means the First Respondent, National Australia Bank Limited (ACN 004 044 937).
(g)NAB hardship notice means a hardship notice within the meaning of s 72(1) of the Code received by NAB, and NAB hardship notices means the NAB hardship notices identified in Schedule A of these Orders.
(h)Response notice means a notice within the meaning of s 72(4)(a) or (b) of the Code.
THE COURT DECLARES THAT:
1.Pursuant to s 166(2) of the Credit Act:
(a)between 16 November 2018 and 14 October 2023, NAB contravened s 72(4) of the Code on 282 occasions by failing to give the debtor a Response notice in respect of the NAB hardship notices, within the time required by s 72(5) of the Code;
(b)further, in respect of 262 NAB hardship notices received by NAB on or after 13 March 2019 (as identified in Schedule A of these Orders), by operation of s 175A of the Credit Act, NAB contravened s 72(4) of the Code on the day after it contravened s 72(4) and on each day thereafter until the date in column (f) of Schedule A of these Orders, by failing to give the debtor a Response notice before the end of the period required by s 72(5) of the Code;
(c)between 9 January 2019 and 20 September 2023, AFSH contravened s 72(4) of the Code on 63 occasions by failing to give the debtor a Response notice in respect of the AFSH hardship notices, within the time required by s 72(5) of the Code; and
(d)further, in respect of 58 AFSH hardship notices received by AFSH on or after 13 March 2019 (as identified in Schedule B of these Orders), by operation of s 175A of the Credit Act, AFSH contravened s 72(4) of the Code on the day after AFSH contravened s 72(4) and on each day thereafter until the date in column (f) of Schedule B of these Orders, by failing to give the debtor a Response notice before the end of the period required by s 72(5) of the Code.
AND THE COURT ORDERS THAT:
2.Pursuant to s 167(2) of the Credit Act:
(a)within 28 days of the date of this order, NAB pay to the Commonwealth of Australia a pecuniary penalty in the amount of $13 million in respect of the contraventions of s 72(4) of the Code referred to in paragraphs 1(a) and 1(b); and
(b)within 28 days of the date of this order, AFSH pay to the Commonwealth of Australia a pecuniary penalty in the amount of $2.5 million in respect of the contraventions of s 72(4) of the Code referred to in paragraphs 1(c) and 1(d).
3.Pursuant to s 182(1) of the Credit Act, within 30 days of this order, NAB and AFSH publish, at their own expense, a written adverse publicity notice in the terms set out in the Annexure to these Orders (Written Notice), according to the following procedure:
(a)NAB and AFSH will cause the Written Notice to be published on the following webpages maintained by each of them respectively:
(i)
(ii)
(iii)
(the websites);
(b)NAB and AFSH will ensure that each notice:
(i)appears on the landing page of the websites as a tile on the websites under the heading, “Adverse publicity order”; and
(ii)is maintained on the websites for a period of no less than 90 days from the date of these orders;
(c)NAB will send a copy of the Written Notice to the last known email or postal address of each person who gave a NAB hardship notice as set out in Schedule A of these Orders; and
(d)AFSH will send a copy of the Written Notice to the last known email or postal address of each person who gave an AFSH hardship notice as set out in Schedule B of these Orders.
4.The respondents pay the applicant’s costs of and incidental to this proceeding, as agreed or assessed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
SCHEDULE A
NAB Credit Contracts
(a)
Ref number
(per ASIC notice NTC2425793)(b)
Type of credit contract
(c)
Date of credit contract
(d)
Date NAB hardship notice received
(e)
Date NAB response notice was due
(f)
Date NAB response provided
(g)
Number of days no NAB response notice provided (where s 175A applies)
N2
Personal loan
29 July 2013
5 April 2019
26 April 2019
13 December 2024 | 11 February 2025
2116
N4
Credit card
14 October 2016
19 March 2020
9 April 2020
11 February 2025
1767
N5
Credit card
29 June 2016
30 June 2020
21 July 2020
11 February 2025
1664
N6
Personal loan
2 July 2015
11 December 2018
2 January 2019
11 February 2025
Ongoing contravention not alleged
N7
Home loan
13 November 2015
11 September 2019
2 October 2019
13 December 2024 | 11 February 2025
1957
N8
Personal loan
29 January 2018
31 May 2019
21 June 2019
11 February 2025
2060
N9
Home loan
9 September 2014
15 August 2019
5 September 2019
13 December 2024
1924
N10
Personal loan
17 October 2019
20 March 2020
14 April 2020
20 December 2024
1709
N12
Home loan
3 October 2014
16 June 2020
7 July 2020
20 December 2024
1625
N13
Home loan
21 May 2015
11 February 2020
3 March 2020
13 December 2024
1744
N14
Home loan
12 November 2013
21 March 2023
11 April 2023
13 December 2024
610
N15
Home loan
25 November 2014
1 April 2020
22 April 2020
13 December 2024
1694
N16
Home loan
3 July 2015
24 March 2023
14 April 2023
20 December 2024
614
N17
Home loan
6 November 2014
28 March 2021
19 April 2021
13 December 2024
1332
N18
Home loan
21 October 2015
6 May 2019
27 May 2019
20 December 2024
2032
N19
Home loan
4 December 2015
12 May 2021
2 June 2021
20 December 2024
1295
N20
Home loan
2 June 2016
26 August 2021
16 September 2021
13 December 2024
1182
N23
Home loan
12 February 2016
10 September 2021
1 October 2021
13 December 2024
1167
N27
Home loan
23 April 2014
11 November 2021
2 December 2021
13 December 2024
1105
N28
Home loan
6 December 2016
12 March 2020
2 April 2020
20 December 2024
1721
N29
Home loan
1 May 2013
19 March 2021
9 April 2021
13 December 2024
1342
N30
Home loan
11 February 2014
21 February 2019
14 March 2019
13 December 2024
Ongoing contravention not alleged
N33
Home loan
21 February 2017
25 July 2023
15 August 2023
13 December 2024
484
N34
Home loan
1 May 2017
8 July 2019
29 July 2019
13 December 2024
1962
N35
Home loan
1 May 2017
22 February 2019
15 March 2019
13 December 2024
Ongoing contravention not alleged
N37
Home loan
22 February 2017
2 August 2021
23 August 2021
20 December 2024
1213
N38
Home loan
31 May 2017
11 November 2019
2 December 2019
13 December 2024
1836
N39
Home loan
13 June 2017
27 May 2019
17 June 2019
13 December 2024
2004
N40
Home loan
7 July 2017
1 July 2019
22 July 2019
13 December 2024
1969
N41
Home loan
5 June 2017
8 October 2020
29 October 2020
13 December 2024
1504
N42
Home loan
24 April 2015
21 February 2022
15 March 2022
13 December 2024
1002
N43
Home loan
19 December 2013
19 August 2021
9 September 2021
13 December 2024
1189
N44
Home loan
17 July 2017
27 September 2021
18 October 2021
20 December 2024
1157
N45
Home loan
14 June 2017
20 March 2020
14 April 2020
13 December 2024
1702
N46
Home loan
31 July 2017
3 April 2023
24 April 2023
13 December 2024
597
N47
Home loan
8 August 2017
22 June 2023
13 July 2023
13 December 2024
517
N48
Home loan
5 September 2017
29 January 2021
19 February 2021
20 December 2024
1398
N50
Home loan
1 September 2017
13 October 2020
4 November 2020
13 December 2024
1498
N51
Home loan
28 October 2013
28 February 2022
21 March 2022
13 December 2024
996
N52
Home loan
16 May 2016
8 May 2023
29 May 2023
13 December 2024
562
N53
Home loan
17 June 2015
10 December 2020
31 December 2020
13 December 2024
1441
N54
Personal loan
23 December 2016
6 January 2020
28 January 2020
13 December 2024
1779
N55
Personal loan
23 November 2015
18 December 2018
8 January 2019
20 December 2024
Ongoing contravention not alleged
N56
Personal loan
13 December 2016
14 November 2018
5 December 2018
13 December 2024
Ongoing contravention not alleged
N57
Personal loan
26 September 2017
13 June 2023
4 July 2023
20 December 2024
533
N59
Home loan
21 August 2014
21 January 2019
11 February 2019
13 December 2024 | 11 February 2025
Ongoing contravention not alleged
N61
Personal loan
28 June 2016
30 March 2020
20 April 2020
13 December 2024
1696
N62
Home loan
9 October 2014
21 June 2022
12 July 2022
13 December 2024
883
N64
Home loan
16 October 2017
1 September 2022
26 September 2022f
13 December 2024
807
N66
Personal loan
18 June 2015
23 March 2020
14 April 2020
13 December 2024
1702
N67
Credit card
13 January 2014
14 December 2020
4 January 2021
20 December 2024
1444
N69
Personal loan
8 January 2016
26 May 2021
16 June 2021
13 December 2024
1274
N70
Personal loan
28 November 2017
27 February 2019
20 March 2019
13 December 2024
Ongoing contravention not alleged
N71
Home loan
30 September 2013
1 November 2021
22 November 2021
13 December 2024
1115
N72
Credit card
7 December 2013
26 March 2020
16 April 2020
13 December 2024
1700
N73
Credit card
9 December 2014
27 March 2020
17 April 2020
13 December 2024
1699
N74
Home loan
19 December 2017
23 May 2023
13 June 2023
20 December 2024
554
N75
Credit card
15 December 2014
9 February 2021
2 March 2021
13 December 2024
1380
N76
Credit card
25 September 2017
1 April 2020
22 April 2020
13 December 2024
1694
N77
Credit card
19 May 2014
25 October 2018
15 November 2018
20 December 2024
Ongoing contravention not alleged
N78
Credit card
17 February 2014
3 January 2019
24 January 2019
13 December 2024
Ongoing contravention not alleged
N79
Credit card
25 March 2014
30 March 2020
20 April 2020
13 December 2024
1696
N80
Home loan
4 January 2018
20 March 2020
14 April 2020
20 December 2024
1709
N81
Credit card
30 June 2014
13 July 2020
3 August 2020
13 December 2024
1591
N82
Credit card
26 November 2015
26 August 2019
16 September 2019
13 December 2024
1913
N83
Credit card
29 January 2014
20 March 2020
14 April 2020
13 December 2024
1702
N88
Personal loan
7 February 2018
25 February 2019
18 March 2019
13 December 2024
Ongoing contravention not alleged
N89
Home loan
15 December 2017
3 August 2021
24 August 2021
13 December 2024
1205
N90
Credit card
12 September 2017
19 March 2020
9 April 2020
13 December 2024
1707
N91
Personal loan
27 April 2015
19 November 2019
10 December 2019
13 December 2024
1828
N92
Home loan
23 September 2014
17 March 2023
11 April 2023
13 December 2024
610
N93
Credit card
5 March 2015
8 January 2020
29 January 2020
13 December 2024
1778
N95
Credit card
9 April 2015
8 May 2019
29 May 2019
13 December 2024
2023
N96
Credit card
9 February 2017
31 August 2020
21 September 2020
13 December 2024
1542
N97
Credit card
1 August 2014
2 April 2020
23 April 2020
13 December 2024
1693
N99
Credit card
30 November 2013
1 May 2019
22 May 2019
13 December 2024
2030
N101
Home loan
29 August 2016
24 February 2022
17 March 2022
13 December 2024
1000
N102
Credit card
27 November 2014
27 March 2020
17 April 2020
13 December 2024
1699
N103
Home loan
4 December 2013
13 October 2022
3 November 2022
13 December 2024
769
N104
Home loan
6 April 2018
13 July 2021
3 August 2021
13 December 2024
1226
N105
Credit card
2 September 2016
14 March 2019
4 April 2019
13 December 2024
2078
N106
Home loan
22 March 2018
26 February 2019
19 March 2019
13 December 2024
Ongoing contravention not alleged
N107
Home loan
17 February 2017
21 September 2021
12 October 2021
13 December 2024
1156
N108
Personal loan
4 May 2017
31 July 2019
21 August 2019
13 December 2024
1939
N109
Home loan
16 December 2014
13 March 2021
6 April 2021
13 December 2024
1345
N110
Credit card
17 December 2014
21 March 2020
14 April 2020
20 December 2024
1709
N111
Credit card
9 August 2016
19 March 2019
9 April 2019
20 December 2024
2080
N112
Credit card
26 October 2016
26 July 2021
16 August 2021
13 December 2024
1213
N113
Credit card
19 April 2016
30 March 2020
20 April 2020
13 December 2024
1696
N114
Home loan
4 May 2018
17 May 2023
7 June 2023
13 December 2024
553
N115
Credit card
3 December 2014
30 March 2021
20 April 2021
13 December 2024
1331
N116
Flexiplus mortgage
24 December 2014
22 September 2021
13 October 2021
13 December 2024
1155
N117
Credit card
6 January 2014
2 March 2020
23 March 2020
13 December 2024
1724
N118
Home loan
9 May 2018
12 April 2023
3 May 2023
13 December 2024
588
N119
Home loan
28 July 2016
23 February 2022
16 March 2022
13 December 2024
1001
N120
Credit card
11 May 2016
3 September 2019
24 September 2019
13 December 2024
1905
N121
Credit card
13 June 2017
26 March 2020
16 April 2020
13 December 2024
1700
N122
Personal loan
7 July 2015
2 May 2019
23 May 2019
13 December 2024
2029
N124
Credit card
13 May 2016
17 April 2020
8 May 2020
13 December 2024
1678
N125
Credit card
3 March 2016
3 October 2019
24 October 2019
13 December 2024
1875
N126
Home loan
4 May 2016
11 November 2021
2 December 2021
13 December 2024
1105
N127
Credit card
1 September 2014
23 April 2019
14 May 2019
13 December 2024
2038
N128
Home loan
21 June 2018
22 April 2022
13 May 2022
13 December 2024
943
N129
Home loan
25 January 2016
3 April 2023
24 April 2023
13 December 2024
597
N130
Personal loan
17 December 2014
21 September 2020
12 October 2020
13 December 2024
1521
N131
Credit card
12 December 2013
4 January 2019
25 January 2019
13 December 2024
Ongoing contravention not alleged
N132
Credit card
9 August 2013
19 January 2021
9 February 2021
13 December 2024
1401
N133
Flexiplus mortgage
12 February 2018
4 September 2019
25 September 2019
13 December 2024
1904
N134
Home loan
13 September 2016
13 May 2023
5 June 2023
13 December 2024
555
N135
Credit card
8 August 2016
17 February 2020
10 March 2020
13 December 2024
1737
N136
Home loan
19 July 2017
23 February 2023
16 March 2023
13 December 2024
636
N137
Personal loan
29 June 2018
17 July 2019
7 August 2019
13 December 2024
1953
N138
Home loan
28 June 2018
19 March 2020
9 April 2020
13 December 2024
1707
N139
Personal loan
20 July 2018
19 March 2020
9 April 2020
13 December 2024
1707
N140
Home loan
20 July 2018
6 September 2021
27 September 2021
20 December 2024
1178
N141
Credit card
21 July 2017
19 March 2019
9 April 2019
13 December 2024
2073
N142
Credit card
31 May 2018
7 November 2019
28 November 2019
13 December 2024
1840
N143
Personal loan
2 December 2016
19 September 2019
10 October 2019
16 December 2024
1892
N144
Credit card
2 March 2018
31 July 2020
21 August 2020
13 December 2024
1573
N145
Personal loan
12 December 2016
2 September 2020
23 September 2020
13 December 2024
1540
N146
Credit card
21 July 2017
29 August 2020
21 September 2020
13 December 2024
1542
N147
Credit card
15 June 2018
18 June 2019
9 July 2019
13 December 2024
1982
N148
Credit card
15 August 2018
21 December 2020
11 January 2021
13 December 2024
1430
N149
Personal loan
7 September 2018
2 September 2022
26 September 2022
13 December 2024
807
N150
Credit card
29 June 2018
15 March 2021
6 April 2021
13 December 2024
1345
N151
Home loan
31 August 2018
8 July 2019
29 July 2019
13 December 2024
1962
N152
Credit card
22 March 2014
18 January 2021
8 February 2021
13 December 2024
1402
N153
Credit card
3 December 2014
29 November 2022
20 December 2022
13 December 2024
722
N154
Credit card
4 September 2017
6 April 2020
27 April 2020
13 December 2024
1689
N155
Personal loan
24 July 2017
13 November 2018
4 December 2018
13 December 2024
Ongoing contravention not alleged
N156
Credit card
7 March 2013
3 September 2021
27 September 2021
13 December 2024
1171
N157
Credit card
9 October 2017
23 March 2020
14 April 2020
13 December 2024
1702
N158
Personal loan
28 September 2018
15 September 2021
6 October 2021
13 December 2024
1162
N161
Credit card
11 September 2013
17 April 2021
10 May 2021
13 December 2024
1311
N162
Credit card
2 May 2016
8 May 2020
29 May 2020
13 December 2024
1657
N163
Home loan
18 March 2014
29 March 2023
19 April 2023
13 December 2024
602
N164
Personal loan
21 July 2016
28 December 2018
18 January 2019
13 December 2024
Ongoing contravention not alleged
N165
Personal loan
25 May 2017
8 July 2019
29 July 2019
13 December 2024
1962
N166
Credit card
9 September 2014
9 June 2020
30 June 2020
13 December 2024
1625
N167
Credit card
30 March 2015
16 September 2021
7 October 2021
13 December 2024
1161
N168
Home loan
5 September 2018
28 February 2020
20 March 2020
13 December 2024
1727
N169
Credit card
22 March 2016
18 July 2019
8 August 2019
13 December 2024
1952
N170
Credit card
12 April 2018
15 September 2021
6 October 2021
13 December 2024
1162
N171
Credit card
18 October 2018
3 November 2021
24 November 2021
13 December 2024
1113
N172
Personal loan
4 January 2018
23 April 2019
14 May 2019
13 December 2024
2038
N173
Credit card
15 July 2015
24 April 2019
15 May 2019
13 December 2024
2037
N174
Credit card
29 October 2015
3 April 2019
24 April 2019
13 December 2024
2058
N175
Credit card
8 September 2016
15 February 2019
8 March 2019
13 December 2024
Ongoing contravention not alleged
N176
Home loan
20 February 2018
11 February 2019
4 March 2019
13 December 2024
Ongoing contravention not alleged
N177
Home loan
23 October 2018
17 December 2019
7 January 2020
13 December 2024 | 20 December 2024
1807
N178
Home loan
23 December 2014
10 January 2019
31 January 2019
13 December 2024 | 11 February 2025
Ongoing contravention not alleged
N179
Home loan
14 February 2014
23 August 2021
13 September 2021
13 December 2024
1185
N180
Home loan
22 August 2017
7 October 2019
28 October 2019
13 December 2024
1871
N181
Home loan
2 January 2019
24 July 2019
14 August 2019
20 December 2024
1953
N182
Credit card
14 July 2016
1 February 2019
22 February 2019
13 December 2024
Ongoing contravention not alleged
N183
Personal loan
25 July 2017
4 February 2019
25 February 2019
13 December 2024
Ongoing contravention not alleged
N184
Credit card
4 July 2014
28 August 2020
18 September 2020
13 December 2024
1545
N185
Home loan
1 November 2017
13 February 2019
6 March 2019
20 December 2024
Ongoing contravention not alleged
N186
Credit card
25 January 2017
21 February 2023
14 March 2023
13 December 2024
638
N187
Home loan
28 September 2018
23 February 2021
16 March 2021
13 December 2024
1366
N188
Credit card
14 January 2019
29 January 2020
19 February 2020
13 December 2024
1757
N189
Home loan
27 February 2017
25 March 2019
15 April 2019
13 December 2024
2067
N190
Credit card
15 December 2015
19 March 2019
9 April 2019
13 December 2024
2073
N191
Credit card
29 November 2014
26 September 2019
17 October 2019
13 December 2024
1882
N192
Interest only home loan
11 May 2017
28 March 2019
18 April 2019
13 December 2024
2064
N193
Home loan
8 September 2017
1 April 2019
23 April 2019
13 December 2024
2059
N194
Home loan
23 July 2013
26 April 2019
17 May 2019
13 December 2024
2035
N195
Home loan
6 March 2019
21 December 2022
11 January 2023
13 December 2024
700
N196
Personal loan
14 February 2019
23 April 2019
14 May 2019
13 December 2024
2038
N198
Home loan
24 December 2014
1 May 2019
22 May 2019
13 December 2024
2030
N199
Home loan
11 April 2019
11 August 2022
1 September 2022
13 December 2024
832
N200
Home loan
15 April 2019
21 March 2023
11 April 2023
13 December 2024
610
N201
Credit card
10 September 2018
28 May 2019
18 June 2019
20 December 2024
2010
N202
Home loan
18 March 2016
14 November 2019
5 December 2019
13 December 2024
1833
N203
Home loan
19 October 2018
1 November 2019
22 November 2019
13 December 2024
1846
N204
Home loan
30 July 2013
10 July 2019
31 July 2019
13 December 2024
1960
N205
Credit card
27 March 2013
27 November 2019
18 December 2019
13 December 2024
1820
N206
Credit card
30 December 2015
5 May 2020
26 May 2020
20 December 2024
1667
N207
Credit card
3 May 2019
24 March 2020
14 April 2020
13 December 2024
1702
N208
Credit card
28 June 2019
7 May 2020
28 May 2020
13 December 2024
1658
N209
Home loan
16 August 2016
9 September 2022
30 September 2022
13 December 2024
803
N210
Personal loan
31 July 2019
8 September 2021
29 September 2021
13 December 2024
1169
N211
Personal loan
7 May 2015
23 June 2020
14 July 2020
13 December 2024
1611
N212
Home loan
20 August 2019
12 April 2023
3 May 2023
13 December 2024
588
N213
Credit card
29 September 2017
16 June 2020
7 July 2020
20 December 2024
1625
N214
Home loan
14 November 2013
5 October 2021
26 October 2021
20 December 2024
1149
N215
Credit card
28 June 2019
7 April 2020
28 April 2020
20 December 2024
1695
N216
Personal loan
12 September 2019
13 November 2019
4 December 2019
13 December 2024
1834
N217
Home loan
11 October 2016
16 October 2019
6 November 2019
13 December 2024
1862
N218
Home loan
9 September 2014
30 December 2019
20 January 2020
13 December 2024
1787
N219
Home loan
18 September 2018
29 October 2019
19 November 2019
13 December 2024
1849
N220
Credit card
23 August 2017
3 November 2019
25 November 2019
13 December 2024
1843
N221
Home loan
5 January 2018
7 November 2019
28 November 2019
13 December 2024
1840
N222
Credit card
22 January 2016
30 April 2020
21 May 2020
13 December 2024
1665
N223
Home loan
22 October 2018
5 November 2019
26 November 2019
13 December 2024
1842
N224
Personal loan
27 September 2017
2 January 2020
23 January 2020
13 December 2024
1784
N225
Home loan
25 June 2014
21 March 2020
14 April 2020
13 December 2024
1702
N226
Home loan
2 September 2014
29 November 2019
20 December 2019
13 December 2024
1818
N227
Credit card
30 October 2019
3 July 2020
24 July 2020
13 December 2024
1601
N228
Personal loan
11 February 2019
2 December 2019
23 December 2019
13 December 2024
1815
N229
Home loan
16 July 2019
17 January 2023
7 February 2023
13 December 2024
673
N230
Home loan
3 July 2014
10 December 2019
31 December 2019
13 December 2024
1807
N231
Personal loan
11 June 2019
25 March 2020
15 April 2020
13 December 2024
1701
N232
Credit card
5 December 2016
13 December 2019
3 January 2020
13 December 2024
1804
N233
Home loan
13 April 2016
14 December 2019
6 January 2020
13 December 2024
1801
N234
Interest only home loan
19 April 2016
27 December 2019
17 January 2020
13 December 2024
1790
N235
Home loan
30 May 2019
13 January 2020
3 February 2020
13 December 2024
1773
N236
Home loan
23 October 2018
6 June 2022
27 June 2022
13 December 2024
898
N237
Credit card
4 July 2016
1 August 2023
22 August 2023
13 December 2024
477
N238
Home loan
30 January 2020
12 June 2023
3 July 2023
13 December 2024
527
N239
Home loan
11 August 2015
19 March 2020
9 April 2020
13 December 2024
1707
N240
Home loan
14 February 2020
12 August 2021
2 September 2021
13 December 2024
1196
N241
Home loan
27 March 2015
16 March 2020
6 April 2020
13 December 2024
1710
N242
Home loan
20 June 2017
19 March 2021
9 April 2021
13 December 2024
1342
N243
Flexiplus mortgage
17 August 2018
30 March 2020
20 April 2020
13 December 2024
1696
N244
Home loan
24 September 2019
20 March 2020
14 April 2020
13 December 2024
1702
N245
Personal loan
10 August 2016
23 March 2020
14 April 2020
11 February 2025
1762
N246
Home loan
16 March 2020
23 December 2021
13 January 2022
13 December 2024
1063
N247
Credit card
13 February 2015
27 March 2020
17 April 2020
13 December 2024
1699
N248
Credit card
1 April 2014
1 April 2020
22 April 2020
13 December 2024
1694
N249
Personal loan
19 August 2015
30 March 2020
20 April 2020
13 December 2024
1696
N250
Flexiplus mortgage
28 February 2019
21 April 2020
12 May 2020
13 December 2024
1674
N251
Home loan
25 March 2013
23 July 2021
13 August 2021
13 December 2024
1216
N252
Home loan
19 October 2015
1 August 2023
22 August 2023
13 December 2024
477
N253
Home loan
23 September 2015
7 August 2021
30 August 2021
13 December 2024
1199
N254
Home loan
29 July 2015
19 July 2021
9 August 2021
13 December 2024
1220
N255
Home loan
11 February 2019
2 December 2020
23 December 2020
11 February 2025
1509
N256
Home loan
1 April 2020
19 January 2021
9 February 2021
13 December 2024
1401
N257
Home loan
22 August 2014
29 March 2021
19 April 2021
13 December 2024
1332
N258
Home loan
7 July 2016
5 July 2021
26 July 2021
20 December 2024
1241
N259
Home loan
26 March 2013
21 October 2022
11 November 2022
13 December 2024
761
N260
Home loan
19 June 2020
4 August 2021
25 August 2021
13 December 2024
1204
N261
Home loan
25 June 2015
6 September 2022
27 September 2022
13 December 2024
806
N262
Home loan
10 June 2014
16 October 2020
6 November 2020
13 December 2024
1496
N263
Home loan
28 September 2020
3 March 2023
24 March 2023
20 December 2024
635
N264
Home loan
9 November 2020
18 August 2023
8 September 2023
13 December 2024
460
N265
Home loan
4 December 2020
2 August 2021
23 August 2021
20 December 2024
1213
N266
Home loan
8 December 2020
20 June 2023
11 July 2023
13 December 2024
519
N267
Home loan
22 December 2020
2 November 2022
23 November 2022
13 December 2024
749
N268
Home loan
24 June 2019
27 January 2022
17 February 2022
13 December 2024
1028
N269
Home loan
16 December 2020
10 August 2023
31 August 2023
13 December 2024
468
N270
Home loan
2 March 2020
20 June 2023
11 July 2023
13 December 2024
519
N271
Home loan
2 December 2013
31 March 2021
21 April 2021
13 December 2024
1330
N272
Credit card
12 January 2021
27 May 2022
17 June 2022
13 December 2024
908
N273
Home loan
13 May 2021
19 June 2023
10 July 2023
13 December 2024
520
N274
Personal loan
26 July 2017
30 July 2021
20 August 2021
13 December 2024
1209
N275
Home loan
10 May 2016
29 July 2021
19 August 2021
20 December 2024
1217
N276
Home loan
9 July 2021
15 August 2023
5 September 2023
13 December 2024
463
N277
Home loan
12 July 2021
25 March 2022
19 April 2022
13 December 2024
967
N278
Home loan
19 November 2015
12 August 2021
2 September 2021
13 December 2024
1196
N279
Home loan
20 November 2020
11 May 2023
1 June 2023
13 December 2024
559
N280
Home loan
5 July 2021
3 November 2022
24 November 2022
13 December 2024
748
N281
Home loan
1 September 2014
26 August 2021
16 September 2021
13 December 2024
1182
N282
Credit card
17 February 2020
28 August 2021
20 September 2021
13 December 2024
1178
N283
Personal loan
22 June 2021
14 June 2022
5 July 2022
13 December 2024
890
N284
Personal loan
14 December 2020
4 October 2021
25 October 2021
13 December 2024
1143
N285
Home loan
13 September 2021
10 August 2023
31 August 2023
13 December 2024
468
N286
Home loan
15 October 2021
8 April 2022
29 April 2022
13 December 2024
957
N287
Home loan
28 February 2020
21 March 2023
11 April 2023
13 December 2024
610
N288
Home loan
9 November 2021
4 March 2022
25 March 2022
13 December 2024
992
N290
Credit card
8 June 2021
11 April 2022
2 May 2022
13 December 2024
954
N291
Personal loan
3 February 2022
9 June 2022
30 June 2022
13 December 2024
895
N292
Credit card
11 January 2022
10 February 2023
3 March 2023
13 December 2024
649
N293
Home loan
18 May 2021
4 March 2022
25 March 2022
20 December 2024
999
N294
Home loan
4 March 2022
9 August 2023
30 August 2023
13 December 2024
469
N295
Home loan
14 March 2022
23 May 2023
13 June 2023
13 December 2024
547
N296
Home loan
11 May 2022
19 June 2023
10 July 2023
13 December 2024
520
N297
Personal loan
22 September 2021
16 June 2022
7 July 2022
13 December 2024
888
N298
Personal loan
4 May 2017
2 August 2022
23 August 2022
13 December 2024
841
N299
Credit card
17 March 2022
9 August 2023
30 August 2023
13 December 2024
469
N300
Personal loan
2 September 2022
29 September 2022
20 October 2022
13 December 2024
783
N301
Home loan
8 September 2022
1 June 2023
22 June 2023
13 December 2024
538
N302
Home loan
20 October 2022
22 September 2023
13 October 2023
13 December 2024
425
N303
Personal loan
30 June 2022
21 November 2022
12 December 2022
13 December 2024
730
N304
Home loan
22 March 2013
18 July 2023
8 August 2023
13 December 2024
491
N305
Home loan
30 April 2019
28 June 2023
19 July 2023
13 December 2024
511
N306
Home loan
24 May 2022
19 April 2023
10 May 2023
13 December 2024
581
N307
Home loan
29 March 2022
28 April 2023
19 May 2023
13 December 2024
572
N308
Home loan
12 May 2021
15 May 2023
5 June 2023
13 December 2024
555
N309
Home loan
19 June 2013
19 November 2019
10 December 2019
13 December 2024
1828
N311
Home loan
24 November 2021
26 July 2023
16 August 2023
13 December 2024
483
N312
Home loan
24 November 2021
16 August 2023
6 September 2023
13 December 2024
462
Total 282
353910
SCHEDULE B
AFSH Credit Contracts
(a)
Ref number
(per ASIC notice NTC2425790)(b)
Type of credit contract
(c)
Date of credit contract
(d)
Date AFSH hardship notice received
(e)
Date AFSH response notice was due
(f)
Date AFSH response notice provided
(g)
Number of days no AFSH response notice provided (where s 175A applies)
A1
Advantedge home loan
20 October 2015
8 December 2022
29 December 2022
13 December 2024
713
A2
Advantedge interest only home loan
23 October 2014
18 December 2018
8 January 2019
12 December 2024
Ongoing contravention not alleged
A3
Advantedge interest only home loan
9 September 2014
2 February 2022
23 February 2022
12 December 2024
1021
A4
Advantedge home loan
2 March 2015
14 October 2019
4 November 2019
12 December 2024
1863
A5
Advantedge home loan
20 April 2015
20 October 2021
10 November 2021
20 December 2024
1134
A6
Advantedge home loan
5 June 2015
6 March 2023
27 March 2023
12 December 2024
624
A7
Advantedge home loan
4 July 2013
4 May 2023
25 May 2023
20 December 2024
573
A8
Advantedge home loan
6 June 2013
1 April 2020
22 April 2020
12 December 2024 | 16 December 2024
1697
A9
Advantedge home loan
27 May 2015
14 October 2019
4 November 2019
12 December 2024
1863
A10
Advantedge home loan
4 November 2016
1 December 2021
22 December 2021
12 December 2024
1084
A11
Advantedge home loan
13 February 2017
13 May 2022
3 June 2022
12 December 2024
921
A12
Advantedge interest only home loan
27 March 2017
27 November 2019
18 December 2019
12 December 2024
1819
A13
Advantedge home loan
4 July 2017
20 May 2022
10 June 2022
12 December 2024
914
A14
Advantedge home loan
16 October 2015
27 September 2022
18 October 2022
12 December 2024
784
A15
Advantedge home loan
12 January 2017
6 February 2019
27 February 2019
12 December 2024
Ongoing contravention not alleged
A16
Advantedge home loan
4 March 2015
17 February 2022
10 March 2022
12 December 2024
1006
A17
Advantedge home loan
10 October 2016
29 August 2022
19 September 2022
12 December 2024
813
A18
Advantedge home loan
21 October 2016
7 July 2022
28 July 2022
12 December 2024
866
A19
Advantedge home loan
12 April 2018
24 February 2020
16 March 2020
13 December 2024
1731
A20
Advantedge home loan
20 April 2017
31 January 2022
21 February 2022
11 February 2025
1084
A21
Advantedge home loan
20 April 2017
8 April 2022
29 April 2022
11 February 2025
1017
A22
Advantedge home loan
2 May 2018
16 August 2021
6 September 2021
12 December 2024
1191
A23
Advantedge home loan
16 October 2017
7 October 2022
28 October 2022
12 December 2024
774
A24
Advantedge home loan
14 December 2017
19 March 2020
9 April 2020
12 December 2024
1706
A25
Advantedge home loan
22 May 2015
3 February 2022
24 February 2022
20 December 2024
1028
A26
Advantedge home loan
7 February 2018
2 January 2019
23 January 2019
12 December 2024
Ongoing contravention not alleged
A27
Advantedge home loan
6 December 2017
9 October 2019
30 October 2019
20 December 2024
1876
A28
Advantedge home loan
4 October 2016
7 September 2021
28 September 2021
20 December 2024
1177
A29
Advantedge home loan
28 October 2016
19 December 2019
9 January 2020
12 December 2024
1797
A30
Advantedge home loan
16 June 2016
11 August 2021
1 September 2021
12 December 2024
1196
A31
Advantedge home loan
20 September 2017
10 October 2019
31 October 2019
12 December 2024
1867
A32
Advantedge home loan
4 May 2018
13 December 2022
3 January 2023
13 December 2024
708
A33
Advantedge home loan
27 January 2017
22 February 2022
15 March 2022
12 December 2024
1001
A34
Advantedge home loan
16 October 2017
4 October 2019
25 October 2019
12 December 2024
1873
A35
Advantedge home loan
13 April 2017
10 January 2023
31 January 2023
20 December 2024
687
A36
Advantedge home loan
2 June 2017
15 May 2019
5 June 2019
12 December 2024
2015
A37
Advantedge home loan
19 January 2017
15 January 2019
5 February 2019
13 December 2024
Ongoing contravention not alleged
A38
Advantedge home loan
14 August 2018
27 August 2021
17 September 2021
12 December 2024
1180
A39
Advantedge home loan
10 December 2018
19 March 2020
9 April 2020
12 December 2024
1706
A40
Advantedge interest only home loan
16 January 2019
24 March 2020
14 April 2020
20 December 2024
1709
A41
Advantedge home loan
8 April 2019
20 October 2021
10 November 2021
13 December 2024
1127
A42
Advantedge home loan
1 May 2019
5 July 2023
26 July 2023
12 December 2024
503
A43
Advantedge home loan
19 August 2019
15 August 2023
5 September 2023
12 December 2024
462
A44
Advantedge home loan
31 October 2019
25 November 2022
16 December 2022
12 December 2024
725
A45
Advantedge home loan
24 January 2020
3 April 2023
24 April 2023
12 December 2024
596
A46
Advantedge home loan
19 February 2020
20 May 2021
10 June 2021
12 December 2024
1279
A47
Advantedge home loan
14 April 2020
9 March 2022
30 March 2022
12 December 2024
986
A48
Advantedge home loan
26 June 2020
6 October 2022
27 October 2022
12 December 2024
775
A49
Advantedge home loan
20 October 2020
25 January 2022
15 February 2022
12 December 2024
1029
A50
Advantedge home loan
5 May 2021
27 January 2022
17 February 2022
12 December 2024
1027
A51
Advantedge home loan
16 August 2021
4 November 2022
25 November 2022
12 December 2024
746
A52
Advantedge home loan
3 September 2021
14 April 2022
5 May 2022
12 December 2024
950
A53
Advantedge home loan
8 November 2021
11 August 2022
1 September 2022
12 December 2024
831
A54
Advantedge home loan
22 February 2022
1 February 2023
22 February 2023
12 December 2024
657
A55
Advantedge home loan
7 March 2022
22 August 2023
12 September 2023
13 December 2024
456
A56
Advantedge home loan
17 March 2022
6 December 2022
28 December 2022
12 December 2024
713
A57
Advantedge home loan
19 April 2022
23 March 2023
13 April 2023
12 December 2024
607
A58
Advantedge home loan
3 June 2022
14 June 2023
5 July 2023
12 December 2024
524
A59
Advantedge home loan
22 June 2022
23 January 2023
13 February 2023
12 December 2024
666
A60
Advantedge home loan
27 October 2022
29 August 2023
19 September 2023
12 December 2024
448
A61
Advantedge home loan
16 October 2017
14 January 2019
4 February 2019
12 December 2024
Ongoing contravention not alleged
A62
Advantedge home loan
5 April 2022
21 June 2023
12 July 2023
12 December 2024
517
A63
Advantedge home loan
27 June 2022
3 February 2023
24 February 2023
12 December 2024
655
Total 63
61,297
THE ANNEXURE: WRITTEN NOTICE
The Written Notice shall contain the following text:
ADVERSE PUBLICITY NOTICE
Ordered by the Federal Court of Australia
The Federal Court of Australia has ordered National Australia Bank Limited (NAB) and its wholly owned subsidiary AFSH Nominees Pty Ltd (AFSH) to publish this adverse publicity notice.
On 13 August 2025, Justice Neskovcin of the Federal Court ordered NAB and AFSH to pay penalties totalling $15.5 million to the Commonwealth for failing to provide written response notices to customers’ hardship notices within the required time frame between November 2018 and October 2023.
The failures by NAB and AFSH to provide written response notices concerned 282 hardship notices given by NAB customers and 63 hardship notices given by AFSH customers, being notices that those customers considered they were, or would be, unable to meet their obligations under a credit contract. The Court found that these failures by NAB and AFSH constituted breaches of section 72(4) of the National Credit Code, being Schedule 1 to the National Consumer Credit Protection Act 2009 (Cth). The Court ordered that NAB pay a penalty of $13 million, and AFSH pay a penalty of $2.5 million.
The failures resulted (with a few limited exceptions) from the incorrect use by NAB staff of a particular functionality in its internal system used to manage hardship notices. The causes have since been identified and NAB has taken steps to address those causes.
Since ASIC commenced court proceedings, NAB and ASFH have provided affected customers with a response to their hardship notice and conducted a remediation program which included remediation payments and the correction of repayment history information for some affected customers.
Further information
For further information about the conduct, see the following links:
·Statement of facts agreed between the parties [hyperlink];
·Supplementary statement of facts agreed between the parties (regarding penalty) [hyperlink];
·Justice Neskovcin’s judgment [hyperlink]; and
·ASIC media release [hyperlink].
REASONS FOR JUDGMENT
NESKOVCIN J:
National Australia Bank (NAB), the first respondent, is a major Australian bank. AFSH Nominees Pty Ltd (AFSH), the second respondent, is part of the NAB Group. NAB and AFSH each hold an Australian Credit Licence.
The applicant, the Australian Securities and Investments Commission (ASIC), commenced this proceeding pursuant to ss 166 and 167 of the National Consumer Credit Protection Act 2009 (Cth) (Credit Act) seeking declarations, payment of pecuniary penalties and other relief arising from contraventions by NAB and AFSH of s 72(4) of the National Credit Code (Code), being Schedule 1 to the Credit Act. ASIC alleged that NAB and AFSH contravened s 72(4) of the Code by failing to provide a written response to hardship notices given by customers within the statutory timeframe prescribed by s 72(5) of the Code.
NAB and AFSH admitted that:
(a)during the period 16 November 2018 to 14 October 2023, on 282 occasions, NAB contravened s 72(4) of the Code by failing to give a written response to hardship notices submitted by NAB customers within the statutory timeframe prescribed by s 72(5) of the Code;
(b)in respect of 262 hardship notices received by NAB on or after 13 March 2019, by operation of s 175A of the Credit Act, NAB contravened s 72(4) of the Code on each day after the contraventions referred to in paragraph (a) above by its continuing failure to give a written response to the hardship notices (resulting in a further 353,910 contraventions up until 10 February 2025);
(c)during the period 9 January 2019 to 20 September 2023, on 63 occasions, AFSH contravened s 72(4) of the Code by failing to give a written response to hardship notices submitted by AFSH customers within the statutory timeframe prescribed by s 72(5) of the Code; and
(d)in respect of 58 hardship notices received by AFSH on or after 13 March 2019, by operation of s 175A of the Credit Act, AFSH contravened s 72(4) of the Code on each day after the contraventions referred to in paragraph (c) above by its continuing failure to give a written response to the hardship notices (resulting in a further 61,297 contraventions up until 10 February 2025).
The parties filed and relied on:
(a)Statements of Agreed Facts and Admissions setting out the facts agreed between the parties pursuant to s 191 of the Evidence Act 1995 (Cth) and NAB and ASFH’s formal admissions of contravention; and
(b)Joint Submissions on liability and relief.
The parties agreed to orders by way of relief in the proceeding, including the imposition of pecuniary penalties. The parties jointly sought declarations of contravention, an order that NAB pay a pecuniary penalty of $13 million in respect of its contraventions of s 72(4) of the Code, an order that AFSH pay a pecuniary penalty of $2.5 million in respect of its contraventions of s 72(4) of the Code, an order in relation to a written adverse publicity notice and an order that NAB and AFSH pay ASIC’s costs of and incidental to the proceeding.
For the reasons that follow, I consider the proposed relief to be appropriate in all the circumstances, including the proposed pecuniary penalty, and I am satisfied that it is appropriate to make the orders proposed by the parties.
BACKGROUND
NAB and AFSH each hold an Australian Credit Licence which authorises them to engage in credit activities under s 6 of the Code and provide credit under credit contracts to which the Code applies. The proceeding concerns contracts for the provision of credit entered into on various dates after 1 March 2013 and before the commencement of the proceeding.
Under the Code, customers can advise their lender of their inability to meet their obligations under a credit contract, referred to as a ‘hardship notice’.
Relevantly, NAB entered into contracts for the provision of credit (the NAB credit contracts) with 345 customers whose claims are relevant to the proceeding (NAB customers). Further, the NAB customers gave NAB, and NAB received, a hardship notice within the meaning of s 72(1) of the Code (NAB hardship notice).
Furthermore, AFSH entered into contracts for the provision of credit (the AFSH credit contracts) with 63 customers whose claims are relevant to the proceeding (AFSH customers). The AFSH customers gave AFSH, and AFSH received, a hardship notice within the meaning of s 72(1) of the Code (AFSH hardship notice).
The NAB and AFSH credit contracts were contracts to which the Code applied.
NAB handled all aspects of the hardship process via its NAB Assist team (a team at NAB dedicated to managing collections, hardship and deceased estate functions for personal and business banking) on behalf of AFSH and NAB.
At all relevant times since about 2016, NAB Assist used the PowerCurve system for managing hardship notices received from customers. This included NAB Assist staff applying certain activities or functionalities within PowerCurve, for example, to approve or decline a hardship arrangement in response to a hardship notice from a customer.
The failure to provide responses to the NAB and AFSH hardship notices was as a result of NAB Assist staff using the “reject hardship request” activity (Activity) in PowerCurve in response to a hardship notice in circumstances where, with the exception of six NAB customers, the reasons for the use of the Activity did not fall within any of its intended uses. The Activity had the effect of removing the relevant NAB or AFSH customer’s account from the hardship workflow so that the NAB Assist team did not send a response notice, or any other written communication related to the hardship notice, to the relevant NAB or AFSH customers, with the exception of one NAB customer who was sent a letter confirming their hardship application had been withdrawn at their request.
From around April 2023, ASIC examined the policies, practices and procedures of credit providers, including NAB, in relation to financial hardship. In that context, in the course of responding to information requests and follow up questions from ASIC in relation to hardship and credit reporting data during 2023, NAB identified numerous instances where it had not responded to a hardship notice within the required timeframe.
On 11 October 2023, NAB notified ASIC of a reportable situation by way of a breach report. The breach report informed ASIC of the failures to provide responses to hardship notices due to the incorrect use of the Activity within PowerCurve.
On 29 October 2024, NAB produced data to ASIC during its investigation which indicated that there was a total of 746 instances where the Activity had been used incorrectly between October 2016 and October 2023. This incorrect use of the Activity represented a rate of about 6% of the approximately 12,600 rejected hardship notices reviewed by NAB. NAB has since taken various corrective measures to address the issue, which are mentioned below.
THE STATUTORY FRAMEWORK
The Code has effect as a law of the Commonwealth pursuant to s 3 of the Credit Act. It provides a consumer protection framework for consumer credit and related transactions, including setting out debtors’ rights to seek changes to credit contracts on the grounds of hardship: Explanatory Memorandum, National Credit Protection Bill 2009 (Cth) (part 4) [8.2], [8.159]–[8.162].
Section 72 of the Code governs aspects of the communications between a credit provider and a debtor where the debtor is facing hardship meeting their obligations under a credit contract entered into on or after 1 March 2013.
The relevant parts of the process under s 72 are as follows:
(a)If a debtor considers that he or she is, or will be, unable to meet their obligations under a credit contract to which the Code applies, the debtor may give the credit provider notice under s 72(1) of the Code, orally or in writing, of their inability to meet their obligations (namely, a hardship notice).
(b)Within 21 days after the day of receiving the debtor’s hardship notice, the credit provider may give the debtor notice under s 72(2) of the Code, orally or in writing, requiring the debtor to give the credit provider specified information within 21 days. If such notice is given, the debtor must comply with the requirement (s 72(3)).
(c)The credit provider must give the debtor a written notice which complies with the requirements in s 72(4)(a) or (b) (as applicable) before the end of the period identified in the table set out at s 72(5) of the Code, which provides as follows:
As noted in the table above, if the credit provider does not require the debtor to provide information under s 72(2), the period specified is 21 days after the day of receiving the hardship notice.
Subsection 72(4) of the Code is a civil penalty provision, which enlivens the Court’s powers to make a declaration of contravention and order the payment of a pecuniary penalty for contravention of that section: ss 166 and 167 of the Credit Act
The current version of s 72(4) of the Code came into effect on 1 March 2013. Save for an increase in penalty units from 2,000 to 5,000 (from 13 March 2019), the amendments to s 72 of the Code during the contravening period were minor and/or of no present relevance.
Section 175A of the Credit Act is entitled “Continuing contraventions of civil penalty provisions” and it provides:
(1) If an act or thing is required under a civil penalty provision to be done:
(a) within a particular period; or
(b) before a particular time;
then the obligation to do that act or thing continues until the act or thing is done (even if the period has expired or the time has passed).
(2)A person who contravenes a civil penalty provision that requires an act or thing to be done:
(a) within a particular period; or
(b) before a particular time;
commits a separate contravention of that provision in respect of each day during which the contravention occurs (including the day the relevant pecuniary penalty order is made or any later day).
Section 175A of the Credit Act was introduced as part of the Treasury Law Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) (Strengthening Penalties Act) and commenced on 13 March 2019. That Act introduced near identical continuing contravention provisions in s 1317QA of the Corporations Act 2001 (Cth) (Corporations Act), s 12GBCM of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and s 75R of the Insurance Contracts Act 1984 (Cth).
The Explanatory Memorandum to the Strengthening Penalties Act provides, at [1.113] (emphasis added):
Contravening a civil penalty provision does not relieve the person of their obligations under the provision. If an act or thing is required to be done, the obligations continue until the act or thing is done. This means that if the act or thing is not done, the civil penalty provision is initially contravened, and a separate contravention is then committed each day until the act or thing is done.
Thus, s 175A of the Credit Act provides that the credit provider’s obligation to give a written notice under s 72(4) of the Code continues until that act is done (s 175A(1)) and a credit provider who contravenes s 72(4) of the Code commits a separate contravention of that provision in respect of each day during which the contravention occurs (including the day the relevant pecuniary penalty order is made or any later day) (s 175A(2)). The transitional provisions of the Strengthening Penalties Act provide that s 175A applies in relation to a contravention of s 72(4) of the Code if the conduct constituting the contravention of the provision occurs wholly on or after the commencement date, being 13 March 2019: National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth), Schedule 8, Part 2, s 3.
The parties did not refer to any authorities in relation to the transitional provisions of the Strengthening Penalties Act. They did, however, refer to Australian Securities and Investments Commission v AustralianSuper Pty Ltd [2025] FCA 102 (Hespe J), where AustralianSuper admitted that between 1 July 2013 to 19 June 2022 it failed to establish rules as required by s 108A of the Superannuation Industry (Supervision) Act 1993 (Cth). ASIC sought civil penalties under s 912A(1)(a) and (5A) of the Corporations Act for failures that occurred between 13 March 2019 to 30 June 2022. Section 912A(5A), which was introduced with effect from 13 March 2019, provides that a contravention of s 912A(1)(a) is a contravention of s 912A(5A), which is a civil penalty provision.
Justice Hespe said, at [164]:
It is only conduct occurring wholly on or after the commencement date which results in the contravention of s 912A(5A) and which attracts the civil penalty provision. However, the fact that contravening conduct commenced occurring prior to the commencement date and continued after the commencement date does not prevent a determination of a contravention in respect of the conduct that occurred after the commencement date. Such an outcome is consistent with the approach adopted in Australian Securities and Investments Commissioner v Westpac Banking Corporation [2022] FCA 515 at [409]–[412] (Beach J) and in Australian Securities and Investments Commission v Macquarie Bank Limited [2024] FCA 416 at [69] (Wigney J).
Finally, the analogous substantive provision, s 1317QA of the Corporations Act, was considered in Australian Securities and Investments Commission v StatewideSuperannuation Pty Ltd [2021] FCA 1650 at [88]–[89] (Besanko J) and Australian Securities and Investments Commission v Noumi Ltd (No 3) [2024] FCA 862 at [49]–[50] (Jackman J). In Statewide Superannuation, the respondent had failed to lodge a written breach report with ASIC within the statutory timeframe in s 912D of the Corporations Act. Besanko J accepted that there was a separate contravention on each day that the defendant failed to lodge the written report. In Noumi, the respondent had failed to notify the ASX of relevant information and contravened the continuous disclosure obligations under s 674(2) of the Corporations Act. Jackman J accepted that, by operation of s 1317QA of the Corporations Act, the contraventions were continuing contraventions, with a separate contravention occurring on each trading day in the relevant periods.
NAB AND AFSH’S CONTRAVENTIONS OF SECTION 72(4)
NAB and AFSH admit that:
(a)each of the NAB customers and the AFSH customers gave NAB or AFSH respectively a hardship notice;
(b)NAB and AFSH each did not give their respective customers, within 21 days after receiving the hardship notice, any notice under s 72(2) of the Code requiring their customer to provide specified information;
(c)pursuant to s 72(4) and (5), NAB and AFSH were each required to give their respective customers a notice in accordance with s 72(4)(a) or (b) (response notice) before the end of the period comprising 21 days after the day it received the hardship notice;
(d)NAB and AFSH did not give their respective customers a response notice at any time before commencement of this proceeding; and
(e)since commencement of this proceeding, NAB and AFSH have each given their respective customers a response notice (with the exception of one NAB customer since deceased).
The parties having agreed the facts which establish each of the elements of a contravention of s 72(4) of the Code, I am satisfied that:
(a)during the period 16 November 2018 to 14 October 2023, NAB contravened s 72(4) on 282 occasions; and
(b)during the period 9 January 2019 to 20 September 2023, AFSH contravened s 72(4) on 63 occasions
(Initial Contraventions).
The parties submit that, in respect of NAB’s and AFSH’s admitted continuing failures to give a response notice to a hardship notice received after 13 March 2019, the Court can be satisfied that, in addition to the Initial Contraventions, after 13 March 2019:
(a)NAB contravened s 72(4) on 353,910 occasions up until 10 February 2025; and
(b)AFSH contravened s 72(4) on 61,297 occasions up until 10 February 2025,
(Continuing Contraventions).
I am satisfied that, in addition to the Initial Contraventions, the Continuing Contraventions arise on or after 13 March 2019 by operation of s 175A of the Credit Act. The parties submitted, and I accept, that:
(a)The transitional provisions of the Strengthening Penalties Act apply to s 175A of the Credit Act.
(b)The relevant enquiry is whether the continuing obligation and failure to give a response notice under s 72(4) by the timeframes prescribed by s 72(5) occurred wholly each day on or after 13 March 2019. That approach is consistent with AustralianSuper at [164] (Hespe J).
(c)By operation of s 175A, a separate contravention of s 72(4) of the Code occurred each day on or after 13 March 2019 that NAB or AFSH contravened s 72(4) of the Code until NAB or AFSH gave the relevant customer a response notice: s 175A(2) of the Credit Act; Statewide Superannuation at [88]–[89] (Besanko J); Noumi at [49]–[50] (Jackman J) .
DECLARATORY RELIEF
ASIC seeks declarations pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) and s 166(2) of the Credit Act. The terms of the declaration were agreed between the parties.
The language of s 166(2) of the Credit Act is mandatory. Once the Court finds that a person has contravened the Credit Act, the Court must give a declaration to that effect.
For the purpose of s 21 of the Federal Court Act, the parties directed the Court to the considerations which generally apply to the making of declarations, as outlined in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972] HCA 61 at 437–8 (Gibbs J). That is, that it is necessary for the Court to be satisfied before making a declaration that:
(a)the question is a real and not a hypothetical one;
(b)the applicant has a real interest in raising the question; and
(c)there is a proper contradictor, that is a person who has a true interest to oppose the declaration sought.
The proposed declarations relate to conduct that contravenes the Code and the Credit Act.
I am satisfied that ASIC has a real interest in seeking declarations of contravention in this proceeding. Declarations record the Court’s disapproval of the relevant conduct and vindicate the regulator’s claim that a party has contravened the law. Declarations sought by regulators serve an important deterrent effect, by warning others of the risk of engaging in conduct giving rise to similar contraventions: Australian Competition and Consumer Commission v Cryosite(2019) 135 ACSR 231; [2019] FCA 116 at [40] (Beach J); Australian Securities and Investments Commission v Allianz Australia Insurance Limited [2021] FCA 1062 at [121] (Allsop CJ).
NAB and AFSH are proper contradictors, even in circumstances where they have made admissions as to the contravening conduct and agreed to the proposed orders: Cryosite at [39]; Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 at [155] (Beach J).
I am satisfied that it is appropriate to make the declarations in the form of the declarations in the proposed orders.
PECUNIARY PENALTIES
The statutory power to impose a pecuniary penalty
The Court has power to order that NAB and AFSH pay a pecuniary penalty under s 167(1) and (2) of the Credit Act: SunshineLoans Pty Ltd v Australian Securities and Investments Commission (2025) 308 FCR 474; [2025] FCAFC 34 at [111] (Perram, Bromwich and Colvin JJ).
Section 167(2) of the Credit Act provides:
Court may order person to pay pecuniary penalty
(2)If a declaration has been made under section 166 that the person has contravened the provision, the court may order the person to pay to the Commonwealth a pecuniary penalty that the court considers is appropriate (but not more than the amount specified in section 167A).
Section 167(3) of the Credit Act provides that, in determining the pecuniary penalty, the Court must take into account all relevant matters, including:
(a)the nature and extent of the contravention; and
(b)the nature and extent of any loss or damage suffered because of the contravention; and
(c)the circumstances in which the contravention took place; and
(d)whether the person has previously been found by a court (including a court in a foreign country) to have engaged in similar conduct.
Approach where the parties have agreed a pecuniary penalty
The practice and approach to making orders proposed by agreement in a civil penalty proceeding was explained by the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46. The plurality (French CJ, Kiefel, Bell, Nettle and Gordon JJ) stated, at [58], that it is consistent with principle and highly desirable in practice for the Court to accept the parties’ proposal as to an agreed penalty, subject to the Court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty proposed is “an appropriate remedy in the circumstances”.
In considering whether the proposed agreed penalty is an appropriate penalty, the Court should generally recognise that the agreed penalty is most likely the result of compromise and pragmatism on the part of the regulator, and can be expected to reflect, amongst other things, the regulator’s considered estimation of the penalty necessary to achieve deterrence and the risks and expense of the litigation had it not been settled: Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission (2021) 284 FCR 24; [2021] FCAFC 49 at [129] (Wigney, Beach and O’Bryan JJ), referring to Fair Work at [109] (Keane J).
Applicable principles
The civil penalty regime in the Credit Act is similar in form to the civil penalty regimes in other Commonwealth statutes including the ASIC Act and the Competition and Consumer Act 2010 (Cth) (CCA) (s 76) and the Australian Consumer Law (being Schedule 2 to the CCA) (s 224). The principles relevant to the interpretation of those provisions were recently summarised by O’Bryan J in Australian Securities and Investments Commission v Vanguard Investments Australia Ltd (No 2) [2024] FCA 1086 at [33]–[37], which I gratefully adopt and repeat insofar as they are relevant to this proceeding.
First, the Court may impose a penalty in respect of each act or omission that constitutes a contravention, subject to the maximum penalty which is stated to apply to each act or omission.
Second, the penalty to be imposed is a penalty that the Court considers appropriate. In that regard, the principal object of imposing a pecuniary penalty is deterrence; both the need to deter repetition of the contravening conduct by the contravener (specific deterrence) and to deter others who might be tempted to engage in similar contraventions (general deterrence): Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20 at [62]–[63] (Keane CJ, Finn and Gilmour JJ); Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 at [65] (French CJ, Crennan, Bell and Keane JJ); Fair Work at [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ) and at [110] (Keane J); Australian Building and Construction Commissioner v Pattinson(2022) 274 CLR 450; [2022] HCA 13 at [15] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).
Third, in determining the appropriate penalty, the Court must take into account all relevant matters, including the specific matters referred to in s 167(3) of the Credit Act. Other factors that are relevant to the assessment of the appropriate penalty, and which were the subject of agreed facts in this proceeding, are:
(a)the deliberateness of the contravention;
(b)whether the contravention arose out of the conduct of senior management or at a lower level;
(c)the size and financial position of the contravening company;
(d)corrective measures taken in response to an acknowledged contravention; and
(e)whether the company has shown a disposition to cooperate with the authorities responsible for the enforcement of the law in relation to the contravention.
Fourth, in considering the sufficiency of a proposed civil penalty, regard must ordinarily be had to the maximum penalty. The maximum penalty provides a “yardstick”, to be taken and balanced with all other relevant factors: Pattinson at [53]–[54]; Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181 at [155]–[156] (Jagot, Yates and Bromwich JJ).
Fifth, in determining the appropriate penalty for a multiplicity of civil penalty contraventions, the Court may have regard to two common law principles that originate in criminal sentencing, the “course of conduct” principle and the “totality” principle: Australian Competition and Consumer Commission v Yazaki Corporation (2018) 262 FCR 243; [2018] FCAFC 73 at [226] (Allsop CJ, Middleton and Robertson JJ) .
Under the “course of conduct” principle, the Court determines whether it is appropriate that a “concurrent” or single penalty should be imposed for the contraventions by considering whether the contravening acts or omissions arise out of the same course of conduct or the one transaction: Yazaki Corporation at [234]. Whether multiple contraventions should be treated as a single course of conduct is a question of fact and degree: Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39 at [39] (Middleton and Gordon JJ). The application of the principle requires an evaluative judgement in respect of the relevant circumstances: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2017) 258 FCR 312; [2017] FCAFC 159 at [425] (Middleton, Beach and Moshinsky JJ). The “course of conduct” principle guards against the risk that the respondent is punished twice in respect of multiple contravening acts or omissions that should be evaluated, for the purposes of assessing an appropriate penalty, as a lesser number of acts of wrongdoing: Cahill at [39].
The “totality” principle operates as a “final check” to ensure that the penalties to be imposed on a wrongdoer, considered as a whole, are just and appropriate and that the total penalty for related offences does not exceed what is proper for the entire contravening conduct in question: Trade Practices Commission v TNT Australia Pty Ltd (1995) ATPR 41–375 at 40,169 (Burchett J); Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53 (Goldberg J).
Maximum penalty
Prior to 13 March 2019, the maximum penalty applying to a corporation under s 167(3)(b) of the Credit Act (from 1 March 2013) was 5 times the maximum number of penalty units referred to in the civil penalty provision (which was 2,000 penalty units).
The Strengthening Penalties Act introduced the following amendments relevant to determining the maximum penalty (from 13 March 2019):
(a)the maximum number of penalty units for a contravention of s 72(4) of the Code increased to 5,000 penalty units;
(b)s 175A of the Credit Act was introduced; and
(c)the maximum pecuniary penalty for a body corporate became the greatest of the penalty specified for the civil penalty provision, multiplied by 10, or the alternative calculations specified in s 167B(2) of the Credit Act.
From 13 March 2019, s 167B(2) has provided as follows:
The pecuniary penalty applicable to the contravention of a civil penalty provision by a body corporate is the greatest of:
(a)the penalty specified for the civil penalty provision, multiplied by 10; and
(b)if the court can determine the benefit derived and detriment avoided because of the contravention—that amount multiplied by 3; and
(c) either:
(i)10% of the annual turnover of the body corporate for the 12-month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision; or
(ii)if the amount worked out under subparagraph (i) is greater than an amount equal to 2.5 million penalty units—2.5 million penalty units.
The parties agreed that s 167B(2)(c) is applicable in determining the maximum pecuniary penalty in this proceeding. Further, s 167B(2)(c)(ii) is applicable, because 10% of the “annual turnover” (within the meaning of s 5 of the Credit Act) of the NAB Group (which includes AFSH) in each 12-month period since 13 March 2019 is greater than an amount equal to 2.5 million penalty units.
In the result, the parties agreed the following maximum pecuniary penalties during the relevant contravention period up until 10 February 2025:
Period of contravention
Maximum per s167B(2)(c)
16 November 2018 to 12 March 2019
N/A
13 March 2019 to 30 June 2020
$525 million
1 July 2020 to 31 December 2022
$555 million
1 January 2023 to 30 June 2023
$687.5 million
1 July 2023 to 6 November 2024
$782.5 million
7 November 2024 to 10 February 2025
$825 million
In this proceeding, the maximum pecuniary penalties that may be imposed are so high as to be “practically meaningless”. Nevertheless, the large number of contraventions and theoretical maximum penalties highlight the seriousness of the conduct in question: Australian Securities and Investments Commission v AGM Markets Pty Ltd (In Liq) (No 4) (2020) 148 ACSR 511; [2020] FCA 1499 at [110] (Beach J); Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liq) (No 3) [2017] FCA 1018 at [32] (Beach J).
Consideration of relevant factors
Nature and extent of contravening conduct
Section 72 of the Code provides a process by which debtors can notify credit providers if they are experiencing hardship and, as such, it provides an important formal mechanism to protect consumers who may be experiencing hardship: Australian Securities and Investments Commission v Membo Finance Pty Ltd (No 2) [2023] FCA 126 at [29] (Yates J).
The total number of admitted contraventions of s 72(4) is high, indicating the significant scope – and thereby the seriousness – of the contravening conduct.
There is a reasonable inference available that the admitted contraventions involved customers who considered themselves to be experiencing financial difficulty at the time they gave NAB or AFSH a hardship notice and who considered themselves unable to meet their loan obligations. The reasons for experiencing hardship provided by NAB and AFSH customers at the time of lodging their hardship notices included medical issues or emergencies, bereavement, family violence, family breakdown, the pandemic, business failure or downturn, natural disaster, redundancy, underemployment/reduced hours and unemployment.
The Initial Contraventions occurred over a period of almost five years, from 16 November 2018 to October 2023, and continued until 10 February 2025. ASIC submitted that it was relevant that NAB reported to ASIC that the incorrect use of the Activity occurred as early as October 2016. The incorrect use of the Activity came to light as a result of ASIC’s information requests to NAB, in 2023, following which NAB took action in relation to the matter including breach reporting the matter to ASIC. ASIC further submitted that it can be inferred that, but for ASIC’s involvement, the contravening conduct may have continued, which NAB and AFSH rejected. It is evident that the contraventions occurred over a number of years before they were discovered and reported to ASIC following ASIC’s information requests. There is a reasonable inference available that the incorrect use of the Activity may have continued if it were not for ASIC’s involvement.
The nature and extent of any loss or damage suffered
The parties agreed that there was no ascertained loss suffered by customers as a result of the contraventions. However, there is a reasonable inference available that the NAB customers and AFSH customers considered themselves to be experiencing financial difficulty at the time they gave the NAB and AFSH hardship notices and considered themselves unable to meet their loan obligations. Further, there is a reasonable inference available that the failure to respond to the NAB customers and AFSH customers’ hardship applications may have compounded any financial difficulty those customers considered themselves to be under and any associated distress from not having their hardship notice responded to in a timely fashion or at all.
Customers were also not made aware by NAB of the reasons why their hardship notice had not been responded to, or the options available to them as a result of the failure to respond to their hardship application (including their rights under the AFCA scheme). These impacts may have been avoided if NAB had provided the affected NAB customers and the AFSH customers with the required notices in response to their hardship notices within the prescribed timeframes.
The circumstances in which the conduct took place, including deliberateness
The circumstance giving rise to the contraventions was the incorrect use by NAB staff of the Activity in NAB’s internal system for managing hardship notices received by NAB and AFSH, with the exception of six NAB customers.
NAB and AFSH did not deliberately engage in the contraventions.
Whether NAB and AFSH have previously been found by a Court to have engaged in any similar conduct
Neither NAB nor AFSH have previously been found by a Court to have contravened the hardship provisions of the Code. However, the parties referred the Court to the following occasions in which NAB has previously been found by a Court to have contravened a civil penalty provision of the Credit Act, the ASIC Act or the Corporations Act.
In 2020, NAB was found to have contravened ss 31 and 47(1)(a) and (d) of the Credit Act as a result of a programme whereby unlicensed ‘introducers’ were engaging in credit activities without an Australian Credit Licence: Australian Securities and Investments Commission v National Australia Bank Limited [2020] FCA 1494 (Lee J). NAB admitted to conduct amounting to 260 contraventions of s 31 of the Credit Act, which also involved 260 contraventions of s 47(1)(d) and a contravention of s 47(1)(a) of that Act, during the period 23 August 2013 to 29 July 2016. NAB was ordered to pay a total penalty of $15 million, after applying a 30% discount for NAB’s cooperation, early admissions, adoption of a remediation scheme and other mitigating factors.
In 2021, NAB was found to have contravened ss 12DA, 12DB(1)(a) and (g) of the ASIC Act and ss 912A(1), 962P, 962S and 1041H of the Corporations Act: Australian Securities and Investments Commission v National Australia Bank Limited [2021] FCA 1013 (Davies J). NAB was ordered to pay pecuniary penalties of $18.5 million in respect of the contraventions of ss 962P and 962S of the Corporations Act and s 12DB(1)(a) and (g) of the ASIC Act. The contraventions arose from NAB:
(a)failing to give fee disclosure statements to a number of financial planning clients with ongoing service program customer agreements, and charging ongoing fees to those clients when it was not entitled to do so because of the breach of the disclosure obligations;
(b)making false or misleading representations to clients in fee disclosure statements, which contained incorrect information about ongoing fees paid by clients and/or services provided to them; and
(c)failing to establish and maintain documented policies, procedures and systems that were adequate to identify whether it had provided review services to clients in accordance with ongoing service agreements and fee disclosure statements, and whether it was prohibited from charging any particular client ongoing fees.
In 2023, NAB was found to have contravened s 12CB of the ASIC Act (unconscionable conduct), in the period from January 2017 to July 2018, as a result of continuing to charge certain fees to customers in circumstances where it knew that it had no contractual entitlement to do so, and omitting to inform its customers as to the wrongful charging or suggest that they review any such fees debited to their accounts: Australian Securities and Investments Commission v National Australia Bank Limited (2022) 164 ACSR 358; [2022] FCA 1324 (Derrington J) and Australian Securities and Investments Commission v National Australia Bank Limited (No 2) [2023] FCA 1118 (Derrington J) (ASIC v NAB (No 2)). In the relevant period, NAB had wrongfully charged periodic payment fees on 74,593 occasions to personal and business banking customers totalling $139,845.90: ASIC v NAB (No 2) at [97]. Derrington J found that there was only one contravention of s 12CB of the ASIC Act: ASIC v NAB (No 2) at [87]. NAB was ordered to pay penalties of $2.1 million in respect of the single contravention, which was the maximum penalty at the time: ASIC v NAB (No 2) at [2].
As Derrington J observed in ASIC v NAB (No 2) at [144], whether or not a contravenor can be said to have engaged in “similar conduct” in the past must involve a relatively broad and impressionistic inquiry. The phrase “similar conduct”, taken in isolation, cannot be understood as necessitating that the conduct in question constituted a contravention of the same statutory provisions, or even provisions within the same statute. I observe that the relevant similarities between the present case and ASIC v NAB (No 2) are that they both involved contraventions of consumer protection provisions arising out of NAB’s failure to have effective systems in place.
Whether the contravention arose out of the conduct of senior management or at a lower level
The failures by NAB and AFSH to provide response notices to the NAB and AFSH hardship notices did not involve senior management of NAB or AFSH.
The size and financial position of NAB and AFSH and deterrence
NAB is a public company and a major Australian bank. AFSH is part of the NAB Group, the ultimate holding company of which is, and was at all relevant times, NAB.
NAB is one of the five largest listed companies by market capitalisation in Australia. As at 30 September 2024, the NAB Group’s total net assets were $62.2 billion. As at close of market on 1 May 2025, NAB’s market capitalisation was approximately $110.25 billion.
The NAB Group’s revenue, profit before income tax and net profit for each year ended 30 September 2019 to 30 September 2024 were as follows:
Year
Net Interest Income ($m)
Other Income ($m)
Profit before income tax ($m)
Net Profit for the year ($m)
2019
$13,558
$4,373
$7,177
$4,801
2020
$13,877
$3,384
$5,163
$2,563
2021
$13,793
$2,936
$9,068
$6,367
2022
$14,840
$3,730
$9,744
$6,891
2023
$16,807
$3,841
$10,450
$7,419
2024
$16,757
$3,889
$9,879
$6,978
The total proposed penalty of $15.5 million represents 0.22% of NAB’s net profit for the 2024 financial year.
In light of the very substantial financial resources of NAB, it is necessary that the proposed penalty is significant, to achieve specific deterrence. There is also the need for general deterrence, noting that s 72 has general application to all credit providers, including banks and other financial institutions, who provide credit services to consumers under the Code. The proposed penalty of $15.5 million is substantial and ought not be regarded by NAB (or a comparably sized business) as an “acceptable cost of doing business”, and it can be expected to deter any potential wrongdoer from engaging in similar contravening conduct: Singtel Optus at [68] (Keane CJ, Finn and Gilmour JJ); TPG Internet at [64] (French CJ, Crennan, Bell and Keane JJ).
Corrective measures and remediation taken in response to an acknowledged contravention
NAB and AFSH have taken various corrective measures to remedy the cause of the failures the subject of this proceeding, which has included the implementation of various controls. These steps were taken in September and October 2023, before the proceeding was commenced. NAB conducted an internal audit of the new controls and has found the steps taken to be effective.
Since the commencement of this proceeding, in addition to sending response notices to the affected customers, NAB and AFSH have undertaken a remediation program under which a subset of affected customers who had experienced collections activity were assessed for any financial or non-financial impact. As a result of this program:
(a)60 customers (relating to 41 instances the subject of this proceeding) have received or will receive payments totalling approximately:
(i)$3,831 for financial impact such as the charging of fees and interest on the relevant account which may not have occurred had their hardship notice been assessed within the prescribed timeframes (an average payment of approximately $64 per customer); and
(ii)$28,500 for non-financial impact (an average payment of $475 per customer).
(b)Any incorrect repayment history information and default notice credit reporting was reviewed and, as a result, repayment history information has been corrected on three customers’ credit reporting files (relating to 3 instances the subject of the proceeding) that otherwise may not have been recorded had their hardship notices been assessed within the prescribed timeframes.
Following commencement of this proceeding, NAB apologised to the NAB and AFSH customers who are the subject of this proceeding. NAB and AFSH also apologised to the Court for their contraventions of the Code.
Whether NAB has shown a disposition to cooperate
NAB has shown a disposition to cooperate with ASIC in this matter. Following ASIC’s Initial Requests Hardship Review Project, in 2023, NAB notified ASIC of a reportable situation by way of breach report submitted on 11 October 2023. NAB and AFSH cooperated with ASIC in the course of its Initial Requests and Hardship Review Project and subsequent investigation, and admitted the contraventions the subject of this proceeding at the earliest available opportunity.
NAB has demonstrated contrition through its cooperation with ASIC, and its apology to, and remediation of, affected customers.
Multiple contraventions and course of conduct
The application of the “course of conduct” principle and the “totality” principle does not convert multiple separate contraventions into a limited number of contraventions, nor does it constrain the available maximum penalty or otherwise displace the imposition of a significant penalty: Reckitt Benckiser at [141], citing Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698 at [24]–[25] (Beach J); Yazaki Corporation at [227], [229]–[235]. The principal objective is to ensure that the penalties imposed are of appropriate deterrent value having regard to the actual, substantive wrongdoing.
The course of conduct principle should not be afforded much significance in assessing the appropriate penalty in this case. As Moshinsky J observed in Australian Securities and Investments Commission v AMP Financial Planning [2022] FCA 1115; (2022) 164 ACSR 64 at [122]:
[T]he ‘course of conduct’ principle does not have paramountcy in the process of assessing an appropriate penalty. It cannot operate as a de facto limit on the penalty to be imposed for contraventions of civil penalty provisions of (in this case) the ASIC Act. The present case is one where, even if the conduct can be described as a single ‘course of conduct’, the contravening conduct affected a large number of members and involved the wrongful deduction of (in total) a substantial sum of money. In my view, in the circumstances of this case, the preferable approach is to have regard to the nature and extent, and the circumstances, of the contravening conduct, including its common features, rather than determining whether the conduct constitutes a single ‘course of conduct’.
Conclusion in respect of the pecuniary penalty
The parties have agreed that the total penalty should be $15.5 million and that it should be apportioned such that NAB pays $13 million and AFSH pays $2.5 million. The Court is not bound by that agreement, and it must impose the penalty it determines is appropriate having regard to all relevant matters. However, the fact that the parties have agreed and jointly proposed a penalty is “plainly a relevant and important matter which the Court must have regard to in determining an appropriate penalty”: Volkswagen at [131] (Wigney, Beach and O’Bryan JJ).
I am satisfied that the agreed penalty of $15.5 million is just and appropriate having regard to the nature and extent and circumstances of the contravening conduct and the need to achieve the appropriate deterrent effect. The proposed apportionment as between NAB and AFSH also is appropriate – it reflects that almost 82% of the hardship notices were lodged by NAB customers. In addition, it is appropriately weighted more heavily towards NAB given that NAB handled all aspects of the hardship process on behalf of NAB and AFSH and it is the parent company of the NAB Group.
ADVERSE PUBLICITY ORDERS
The agreed orders include an adverse publicity order that requires NAB and AFSH to disclose to the affected customers a written adverse publicity notice (by mail or email), as well as to publish that notice on their respective websites.
Section 182(1) of the Credit Act gives the Court power to make adverse publicity orders against a person who has contravened a civil penalty provision. An adverse publicity order is defined in s 182(2) of the Credit Act as follows:
(2) An adverse publicity order is an order that:
(a)requires a person to disclose, in the way and to the persons specified in the order, such information as is so specified, being information that the person has possession of or access to; or
(b)requires a person to publish, at the person’s expense and in the way specified in the order, an advertisement in the terms specified in, or determined in accordance with, the order.
Analogous powers are contained in s 12GLB(1)(a) of the ASIC Act, and s 1101B(1) of the Corporations Act. The Court has a broad discretion as to whether to make such orders. The purpose of adverse publicity orders is both punitive and protective, in the sense of dispelling incorrect or false impressions and/or alerting the public and customers to the fact of contravening conduct: Australian Securities and Investments Commission v Aware Financial Services Australia Ltd [2022] FCA 146 at [35] (Moshinsky J), referring to Australian Securities and Investments Commission v Commonwealth Bank of Australia (No 2) [2021] FCA 966 at [7]–[17] (Lee J).
It is not uncommon for the Court to order that corrective notices or adverse publicity notices be mailed or emailed directly to affected persons and also be published on the contravener’s website –– doing so is more likely to bring the notice to the affected person’s attention than doing so solely via the contravener’s website: Australian Securities and Investments Commission v Colonial First State Investments Limited [2021] FCA 1268 at [86(d)] (Murphy J).
I am satisfied that the proposed adverse publicity order is appropriate to alert the public and NAB’s and AFSH’s customers to the fact of the contravening conduct.
COSTS
The Court has power to award costs pursuant to s 43 of the Federal Court Act. The parties have agreed that NAB and AFSH should pay ASIC’s costs of, and incidental to, the proceeding. I will make an order in the terms sought.
CONCLUSION
I am satisfied that it is appropriate to make the orders agreed by the parties and will make orders substantially in the terms sought.
I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Neskovcin. Associate:
Dated: 13 August 2025
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