A regulator has been concerned National Australia Bank may not compensate all customers charged fees for services they did not receive, royal commission documents reveal.
The Australian Securities and Investments Commission is investigating "suspected offending" by NAB over charging fees for no service.
The suspected breaches of the law are "serious and systemic", an October 2017 outline of ASIC's concerns released by the banking royal commission shows.
"NAB's failure to provide ongoing services while continuing to charge clients fees for those services was widespread and affected a large number of clients over a period of many years," ASIC says.
"The failures have occurred across a number of NAB group entities, meaning this was not an isolated problem but a systemic failure of fundamental controls within the NAB group."
NAB has paid compensation to affected customers over some of the fees-for-no-services issues.
The bank failed to have part of ASIC's outline of suspected offending suppressed, where it related to NAB's approach to further compensation.
ASIC disagreed with NAB's view it should test whether there was a customer-adviser interaction rather than whether it delivered on the express commitments it gave customers.
"ASIC is concerned that NAB's interpretation of its obligations means that NAB will fail to identify and compensate customers who did not receive the ongoing services they paid for."
As revealed in the inquiry last week, the 2017 report states ASIC was concerned by NAB and its group licensees' apparent failure to appreciate the extent and seriousness of the issue despite being on notice since at least 2010.
ASIC says the bank and the group entities have, by their own admission, fallen below the standards expected of a responsible Australian financial services licensee.
"In short, they have failed to do all things necessary to ensure that the financial services provided by them are done so efficiently, honestly and fairly."
ASIC suspected NAB has committed numerous contraventions of sections of the Corporations Act and ASIC Act, some of which may carry criminal as well as civil penalties.
ASIC has separately accused the bank of failing to report significant breaches of its licence on time on 110 occasions, which is a criminal offence.
The bank has denied committing any criminal acts.
