The Australian Securities and Investments Commission (ASIC) has announced it is pursuing civil penalty proceedings against AMP Limited over charging deceased customers.
The regulator announced today that it is alleging that AMP entities were involved in charging life insurance premiums and advice fees to more than 2,000 customers despite having been notified of their death.
The AMP entities were listed as AMP Superannuation Limited, NM Superannuation, AMP Life, 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; 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.
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 seeks declarations of contraventions of the ASIC Act and Corporations Act. ASIC is also seeking pecuniary penalties and other orders to be made by the Federal Court.
ASIC said it commenced the proceeding because licenced financial services companies need to have robust compliance systems to ensure they meet their legal obligations to customers. Customers, and their beneficiaries, should have confidence that they will be correctly and lawfully charged for any financial services or products.