NAB charged 2,888 personal banking customers and 513 business banking accounts periodical payment fees (PP fees) when it knew it had no contractual agreement to do so and failed to inform its customers about the wrongful charging on their accounts.

The PP fees were charged on 74,593 occasions and totalled $139,845.90. On average, each of the personal banking and business banking customers was charged $41.11.

All but 72 affected customers have been paid remediation.

Justice Roger Derrington said that rather than “shut the dysfunctional system down” while the bank investigated the wrongful charging of the PP fees, NAB chose to protect its commercial interests.

“In this time, no one within the bank formed the view that, regardless of the financial consequences, it was inappropriate to continue withdrawing money from customers’ accounts in the absence of any authorising mandate,” Justice Derrington said.

Viewed against NAB’s “repeated” offending against financial services legislation, Justice Derrington said it appears the banking giant “places a low priority on respecting the legal rights of its customers”.

“It deliberately and cynically took advantage of its customers’ unawareness and was prepared to allow the overcharging to continue whilst it searched, admittedly in good faith, but without any great diligence, for a solution,” Justice Derrington added.

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“Such moral dereliction would seem to reflect an inherent sense of entitlement, possibly precipitated by a view that no real harm would come to the bank even if its conduct was detected.”

As the court concluded there was just one contravention, the maximum penalty that could be imposed is $2.1 million.

Justice Derrington said this was “regrettable” as only a substantial penalty could deter NAB from engaging in similar conduct again.

“The maximum penalty of $2.1 million is unlikely to have any real impact on the bank’s future conduct,” Justice Derrington said.