AMP accused by ASIC of charging deceased customers

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. 

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While not condoning what has been alleged, one would question how much of that was paid to the beneficiaries along with the death payments, and if not death payments, paid back to the estate when claimed. With death cover specifically, I would prefer they keep debuting, they can’t then argue about a cancellation of the policy, and would refund premiums with the death payment. When are ASIC going to take aim at fee for no service within the IFS. How can fees be charged “in case” you use there service not meet the definition of fee for no service? Just after low hanging fruit as usual…

Not saying AMP aren’t dodgy cause clearly they are. ASIC let the big banks and AMP be dodgy for at least 10 years when it already knew of many of these problems and ASIC did nothing. Hope ASIC also take themselves to court for being paid but not doing their job.
Hey ASIC, ever dealt with a deceased estate ? It’s a load of work. Advisers should have a minimum 6 mth ongoing fee payable post notifying of death. Otherwise Advisers have to get a bunch more costly Fee forms completed to get paid. But ASIC are too stupid to be so practical and live in the Real World.

I am pretty sure the government also does this with out recourse.

Can someone in a position of influence have a grown up discussion with ASIC around fees being charged to deceased estates please? Experienced advisers understand that there is often an awful lot of time and work undertaken by advisers supporting executors of deceased clients. Are ASIC saying that this work should be unpaid? Insurance companies, local councils, the tax office all continue to get paid by deceased estates as they rightly should - if I passed away I am pretty sure ASIC won't waive the annual fees I pay for my companies, AFSL etc? If an adviser provides valuable service to the estate they have a legal right to be paid just like everyone else. The executor(s) must provide informed consent for said fees but if an adviser does the work they should reasonably expect to get paid. If a deceased estate paid fees and no advice / service was provided then that is a fee for no advice issue like any other - whether the client is alive or has passed away is irrelevant. Lets get the emotional click bait headlines out of the way and deal with the real issue please ASIC!

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