Join our daily newsletter At The Bell to receive exclusive market insights
- Australian Securities and Investments Commission (ASIC) begins a civil lawsuit against six AMP companies
- The latest legal action relates to AMP charging fees for no service on corporate superannuation accounts
- It follows another lawsuit started by ASIC against AMP for charging life insurance premiums and advice fees to more than 2000 dead customers
The Australian Securities and Investments Commission (ASIC) has begun a civil lawsuit against six AMP companies.
The financial regulator alleges the companies charged fees for no service on corporate superannuation accounts.
Targeted by ASIC in the new court action are AMP Superannuation, AMP Financial Planning Proprietary, AMP Services, Charter Financial Planning, Hillross Financial Services and AMP Life Ltd. AMP Life Ltd is now part of the Resolution Life Group, but sat under AMP during the alleged misconduct.
ASIC alleges the AMP companies charged fees to more than 15,000 clients despite being notified that they customers were no longer able to access the relevant advice.
AMP earned more than $600,000 in fees from affected accounts, ASIC says.
The regulator has also alleged that from July 2015 to April 2019, the AMP companies:
- Deducted financial advice fees from 1540 customers’ superannuation accounts in spite of knowing that the customer had left their employer-sponsored superannuation account and could not access the advice for which the fees were paid
- Neglected to put in place a system that did not charge customers who had left their employer-sponsored account
- Contravened Australian financial services licence obligations to act efficiently, honestly and fairly
ASIC has sought declarations, financial penalties and adverse publicity orders to be made by the Federal Court.
A date is still to be set for the case management hearing.
The action follows another fees-for-no-service matter over which ASIC sued AMP in May that found the company charged life insurance premiums and financial advice fees to more than 2000 dead customers of whose death the company had been notified — from which the company made more than $500,000.
AMP has compensated affected members and repaid more than $900,000 to the affected accounts.
The regulator decided to go no further after looking into suspected misconduct, where AMP Financial Planning allegedly charged fees for no service in relation to its buyer of last resort policy.
This court action has follows another lawsuit started by ASIC against five AMP companies for charging life insurance premiums and advice fees to more than 2000 dead customers despite being notified of their deaths.
ASIC has said it will continue enforcement investigations and remediation for customers affected by fees-for-no-service conduct.
By the end of last year, Australia’s largest banking and financial services institutions had paid, or offered, $1.04 billion in compensation as a result of the issue. AMP had paid more than $153.7 million to more than 200,000 customers.
