NAB made the disclosure two years after it first realised members of its
staff, together with commission-paid agents, were taking liberties with
loan applications as early as 2013 by filling in parts of them.
Another investigation is now underway to determine if applications were
falsified and forged, which could lead to some of the 2300 affected customers
being offered compensation.
CHOICE understands a minority of these customers have not been able to
service their loans.
"We have investigated this matter thoroughly," says Andrew Haggar, chief customer officer for consumer banking at NAB.
"As we have always said, whenever we find issues we will investigate them,
fix them, and hold people to account – and we did."
The bank terminated 20 staff members as a result, and reprimanded another
32 bankers by reducing their pay.
NAB reported the findings of an "initial high-level review" to the
financial regulator in December 2015. The investigation found a network of
accountants, solicitors, financial planners and realtors – who were
receiving commission payments from NAB under its Introducer Program – worked with the bank's staff in the improper handling of mortgage
The bank claims it has since revised its Introducer Program, but a
spokesperson would not confirm if any changes have been made to the
It is unclear why it has taken nearly two years to make the conduct public
and launch a subsequent remediation program.
Frontline lenders have an obligation to detect and mitigate the risks of
loan fraud, says John Price, commissioner of the Australian Securities
and Investment Commission (ASIC), adding that the commission is watching NAB's
handling of the issue.
"ASIC continues to investigate the conduct of those involved in this
matter," he says, "and that process is well advanced."
Financial Rights Legal Centre acknowledges NAB has been proactive in its
dealing with loan fraud, but warns the issue is systemic to the mortgage
brokering and lending industry.
"We would like to see all banks taking proactive steps to review loans and
arrangements with brokers to ensure consumers affected are compensated
accordingly and rogue operators are disciplined or terminated," says
Alexandra Kelly, a principal solicitor at the community law centre.
"It is critical too that measures are put in place to ensure that these
rogue operators are not left to simply get jobs in other financial