The Australian Securities & Investments Commission (Asic) has started civil proceedings against wealth giant AMP.
The watchdog alleged that five firms that are part of the AMP Group were “involved in charging life insurance premiums and advice fees to more than 2,000 clients despite being notified of their deaths”.
The firms in question are:
- AMP Superannuation Limited;
- NM Superannuation Proprietary Limited;
- AMP Life Limited – now owned by Resolution Life New Zealand but was part of the group when the alleged breaches occurred;
- AMP Financial Planning Proprietary Limited; and,
- AMP Services Limited.
Asic alleges that between May 2015 and August 2019 each of the five businesses did at least one of the following:
- Deducted life insurance premiums from 2,069 dead customers’ superannuation accounts despite being informed of their deaths;
- Deducted financial advice fees from the customers’ superannuation accounts despite being notified of their deaths;
- Failed to have a system in place to avoid charging dead customers;
- Failed to manage conflicts of interest between the AMP firms’ charging of fees and the members’ interests in ceasing fee-payments after death; and,
- Breached their overarching obligations as licensees to act “efficiently, honestly and fairly”.
The regulator added that the companies’ conduct demonstrated a pattern of behaviour that was “unconscionable”.
Asic alleged that the five AMP subsidiaries received more than A$500,000 (£273,412, $386,878, €317,030) from life insurance premiums, with at least A$350,000 charged between May 2015 and August 2019.
And additional A$100,000 is alleged to have been received from advice fees, with A$75,000 charged during the same period.
As a result, the regulator is seeking financial penalties against the five companies.
David Cullen, AMP Group general counsel, said: “AMP has taken this matter very seriously and we will now carefully consider the allegations raised by Asic. We have been assisting Asic with its investigation and will continue to engage constructively as part of the legal process.
“When we discovered the issues, we immediately moved to change our processes and systems and took action to ensure the beneficiaries of customers impacted were fully remediated. AMP apologises to all customers and beneficiaries who were impacted by this matter.”