NAB sets up compensation program over poor advice
National Australia Bank (NAB) is setting up a formal remediation program aimed at compensating clients who received poor financial advice from its representatives, following pressure from the regulator, Australian Securities and Investments Commission (ASIC), and the public. The bank has also paid AUD 1.7m ($1.2m) in compensation to 87 customers since February, on top of the $15m ($10.8m) paid out to 750 customers in the preceding five years.  ASIC said in a statement that it will "ensure that the CRI will provide a fair and effective mechanism for customers to be properly compensated".

National Australia Bank has bowed to regulatory and community pressure and set up a formal remediation program aimed at compensating clients who received poor financial advice from its representatives.

From this Wednesday, NAB will be contacting customers who may have been victims of poor advice since 2009, the corporate watchdog said in a statement.

NAB will be contacting customers who may have been victims of poor advice since 2009. Credit: Nic Walker

According to the Australian Securities and Investments Commission, affected NAB clients will have their files reviewed to determine if compensation should be paid.

In February, Fairfax Media revealed the bank had allegedly created a culture that financially damaged hundreds of customers through advisers accused of engaging in misconduct, forgery and fraud in relation to consumer loans made by NAB.