‘Unconscionable’: AMP taken to court for allegedly charging dead customers
ASIC has launched civil penalty proceedings in the Federal Court against five companies that are, or were, part of the AMP Limited group (AMP).
ASIC alleges AMP was involved in charging life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death.
The relevant companies include AMP Superannuation, NM Superannuation, AMP Life (now part of Resolution Life Group, but was part of AMP when the alleged conduct occurred), AMP Financial Planning, and AMP Services.
ASIC alleges that from May 2015 to August 2019, each of the AMP Companies 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
Contravened their overarching obligations as Australian financial services licensees to act efficiently, honestly and fairly.
While AMP was called out for charging fees to dead customers during the Royal Commission into Financial Services, these latest charges allege AMP has continued to do so in the years since.
ASIC further alleges that AMP conduct demonstrated “a system of conduct or pattern of behaviour that was, in all the circumstances, unconscionable”.
ASIC alleges that the 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 licenced financial services companies need to have robust compliance systems to ensure they meet their legal obligations to customers,” ASIC said in a statement,
“Customers, and their beneficiaries, should have confidence that they will be correctly and lawfully charged for any financial services or products.”
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.