Invest
Mums and Dads’ pain fuels possible AMP class action
As AMP faces a potential class action over its “dishonesty”, the government is also under heavy fire for its historic opposition to the royal commission.
Mums and Dads’ pain fuels possible AMP class action
As AMP faces a potential class action over its “dishonesty”, the government is also under heavy fire for its historic opposition to the royal commission.
Quinn Emanuel Urquhart & Sullivan (QE) has announced it is investigating a potential class action against AMP, after the financial services firm revealed to the royal commission that it had charged customers fees for services they did not receive.
AMP has lost $1 billion in shareholder value since the beginning of March.
“The revelations of AMP’s misconduct are especially upsetting given the people who were hurt – the ordinary Mums and Dads who as shareholders gave AMP one of Australia’s largest shareholder registers, who have now lost their savings due to its dishonesty, and who as customers were charged for services AMP has admitted they never received, all so executives could make hefty bonuses,” said QE partner, Damian Scattini.
Noting that litigation finance provider, Burford Capital has backed the class action; Mr Scattini said the partnership with Burford meant it could now act quickly.
He added that QE had been monitoring AMP’s “precipitous share price fall” prior to the royal commission.
Reflecting on this, the managing director of Burford, Craig Arnott said: “The conduct admitted at the royal commission is starkly at odds with AMP’s responsibilities and shareholders’ legitimate expectations, requiring redress so that AMP’s shareholders can recover the value that has been lost.
“Burford is glad to join forces with Quinn’s first-rate team so we can help deliver that result for shareholders, which we hope will be as swift as possible.”
The class action follows the departure of AMP CEO Craig Meller, who left the company on Friday morning. Speaking upon his exit, he said it was the “appropriate measure” to begin to restore trust in AMP.
Government under fire
However the government — Treasurer Scott Morrison and Minister for Revenue and Financial Services Kelly O’Dwyer in particular — is also facing questioning around its prior reluctance to establish the royal commission in the first place.
In April 2016 Mr Morrison said Mr Shorten’s calls for a royal commission were “playing politics with people’s genuine pain about the negative experiences they have had with banks. It is cynical.”
Responding to questioning last week about whether he was wrong to label Bill Shorten’s call for a royal commission a “political exercise for a political hack” that “doesn’t give anybody anything”, Mr Morrison said he would not engage in political point scoring.
Mr Morrison was also asked last week if he was glad that the government eventually agreed to the royal commission.
He responded: “We weren't going to wait around until a commission was conducted to do something. We are already doing something,” referring to the boosted powers to penalise financial wrongdoing under the Corporations Act.
Ms O’Dwyer has also copped scrutiny. In an interview with the Australian Broadcasting Corporation on Saturday, she was asked if she was “embarrassed” about previously calling the royal commission a talk-fest.
“We have all been appalled by a number of issues that have been aired at the royal commission,” she responded.
Further questions around the government’s reluctance to establish the royal commission were also parried.
In an April 2016 interview, Ms O’Dwyer said: “No one credible is actually asking for a royal commission.
“[A royal commission] will make recommendations. It will not provide compensation, it will not do anything other than investigate which is what we have already done with two separate inquires.”
However, when asked on Saturday about her characterisation of the royal commission, Ms O’Dwyer said: “You can obsess and Labor can obsess about these issues. I'm actually obsessed about fixing the problems and that's what I have been focused on as a minister.”
She continued: “You can't rush into these things as a stunt. Bill Shorten went on radio in Melbourne declaring the need for a royal commission and he said, "I have jotted down some ideas on a piece of paper." They never produced terms of reference.
“In fact, when the government established the royal commission at the beginning, they said it was going to be a whitewash. Then they said the banks had written the terms of reference and now they want to claim credit.
“Let me say to you – we have done the right thing for the Australian people.”
Speaking this morning, Prime Minister Malcolm Turnbull said the decision to hold off on establishing the royal commission was to prevent being hamstrung by the process.
He said: “The reason I didn’t proceed with a royal commission is this: I wanted to make sure that we took the steps to reform immediately and got on with the job.
“My concern was that a royal commission would go for several years – that’s generally been the experience – and people would then say, “Oh you can’t reform, you can’t legislate, you’ve got to wait for the royal commissioner’s report.” You know, that’s exactly what everyone would have said.”
The Prime Minister added: “You can’t live your life backwards.”
However, replying to questioning around whether Bill Shorten has been vindicated, Mr Turnbull conceded that he take responsibility for “making the call to put action and reform and legislation first”.
“The choice that we made was to put customers right at the forefront of our focus and say, “Right, we know what the problem is.” We don’t know every case of wrongdoing and we never will, let’s be frank, the royal commissioner has made that point. But what we did know, was that banks and other financial institutions had not been putting customers first. I spoke about that very plainly two years ago.
“So the course of action I followed was the one of substantive reform, to get on with that job.”
Spending
How much are you wasting on unused subscriptions?
Australians are continuing to pay for subscriptions they are not using, costing households up to $2,000 a year, new banking figures have revealed. ...Read more
Spending
Viagogo under the microscope for ‘ripping off’ consumers
Viagogo is under investigation by Fair Trading after ticket scalpers have been accused of raking in excessive profits through the ticketing site. ...Read more
Spending
Consumer spending defies lockdown
Statewide lockdowns have not hampered consumer spending, with the latest government data showing Aussies are continuing to spend more on their credit cards. ...Read more
Spending
How a cartel is dictating how much you pay at the pump
Talks among members of the OPEC cartel and allied oil producing countries have broken down, which is leading to skyrocketing oil prices, meaning everyone pays more for petrol, a government body has re...Read more
Spending
Have you noticed the price of your mobile plan increasing?
The consumer watchdog has revealed that the three main telecommunication providers have recently raised prices, meaning millions of Australians are now paying more for mobile services. ...Read more
Spending
Victoria’s lockdowns dampen retail spending
The latest COVID-19 outbreak in Victoria has dented national retail figures, as the economy continues to recover from the COVID-19 pandemic. ...Read more
Spending
It should be easier to fix your phone, Productivity Commission finds
The Productivity Commission has found that it should be easier for Australians to get their smartphone repaired and has recommended changes that include ‘super complaints’ to be reported to watchd...Read more
Spending
You can win free flights for a year, but there’s a major catch
In a bid to keep Australia’s domestic aviation afloat, Qantas is offering free flights for a year for 10 families of four who get the COVID-19 jab, even though the failed vaccine rollout means only ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Spending
How much are you wasting on unused subscriptions?
Australians are continuing to pay for subscriptions they are not using, costing households up to $2,000 a year, new banking figures have revealed. ...Read more
Spending
Viagogo under the microscope for ‘ripping off’ consumers
Viagogo is under investigation by Fair Trading after ticket scalpers have been accused of raking in excessive profits through the ticketing site. ...Read more
Spending
Consumer spending defies lockdown
Statewide lockdowns have not hampered consumer spending, with the latest government data showing Aussies are continuing to spend more on their credit cards. ...Read more
Spending
How a cartel is dictating how much you pay at the pump
Talks among members of the OPEC cartel and allied oil producing countries have broken down, which is leading to skyrocketing oil prices, meaning everyone pays more for petrol, a government body has re...Read more
Spending
Have you noticed the price of your mobile plan increasing?
The consumer watchdog has revealed that the three main telecommunication providers have recently raised prices, meaning millions of Australians are now paying more for mobile services. ...Read more
Spending
Victoria’s lockdowns dampen retail spending
The latest COVID-19 outbreak in Victoria has dented national retail figures, as the economy continues to recover from the COVID-19 pandemic. ...Read more
Spending
It should be easier to fix your phone, Productivity Commission finds
The Productivity Commission has found that it should be easier for Australians to get their smartphone repaired and has recommended changes that include ‘super complaints’ to be reported to watchd...Read more
Spending
You can win free flights for a year, but there’s a major catch
In a bid to keep Australia’s domestic aviation afloat, Qantas is offering free flights for a year for 10 families of four who get the COVID-19 jab, even though the failed vaccine rollout means only ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
