Retirement
ASIC sues AMP over ‘unconscionable’ behaviour
ASIC is taking AMP to court over allegations it charged life insurance premiums and advice fees to more than 2,000 deceased customers and pocketed over half a million dollars.
ASIC sues AMP over ‘unconscionable’ behaviour
ASIC is taking AMP to court over allegations it charged life insurance premiums and advice fees to more than 2,000 deceased customers and pocketed over half a million dollars.
ASIC said in a statement that it will commence civil penalty proceedings in the Federal Court against five companies that are, or were, part of the AMP Ltd group, alleging that these entities were involved in charging life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death.
According to ASIC, from May 2015 to August 2019, AMP Superannuation Ltd; NM Superannuation Proprietary Ltd; AMP Life Ltd, which is now owned by Resolution Life NZ; AMP Financial Planning Proprietary Ltd; and AMP Services Ltd did one or more of the following:
- deducted life insurance premiums from 2,069 deceased customers’ superannuation accounts despite being notified that the customer had died;
- deducted financial advice fees from deceased customers’ superannuation accounts despite being notified that the customer had died;
- failed to ensure that a system was in place that ensured that it did not charge deceased customers;
- failed to ensure that a system was in place to manage conflicts of interest between the AMP Companies’ interests in continuing to charge premiums and advice fees and members’ interests in premiums and advice fees ceasing after death; and
- contravened their overarching obligations as Australian financial services licensees to act efficiently, honestly and fairly.
ASIC further alleges that the AMP companies’ conduct demonstrated a system of conduct or pattern of behaviour that was, in all the circumstances, unconscionable.
According to the corporate watchdog, AMP companies received over $500,000 in insurance premiums from the superannuation accounts of deceased customers, with at least $350,000 charged between May 2015 and August 2019. Additionally, it is alleged that the AMP companies received over $100,000 in advice fees from deceased customer accounts, with at least $75,000 being charged between May 2015 and August 2019.
“ASIC commenced this proceeding because licensed financial services companies need to have robust compliance systems to ensure they meet their legal obligations to customers,” it said on Thursday morning.
AMP group general counsel David Cullen has responded to ASIC’s announcement, noting that “AMP apologises to all customers and beneficiaries who were impacted by this matter”.
“AMP has taken this matter very seriously, and we will now carefully consider the allegations raised by ASIC.”
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