ASIC sues AMP companies over fees for no services allegations

ASIC sues AMP companies over fees for no services allegations

Australia's corporate watchdog has commenced Federal Court proceedings against six companies that are, or were, part of AMP Limited (ASX: AMP), alleging the entities charged fees for no service on corporate superannuation accounts.

The Australian Securities and Investment Commission (ASIC) alleges the AMP companies charged advice fees to more than 1,500 customers despite being notified that those customers were no longer able to access the relevant advice.

It is alleged that AMP (via AMP Superannuation Ltd, AMP Life Ltd, AMP Financial Planning Pty Ltd, AMP Services Ltd, Charter Financial Planning Ltd and Hillross Financial Services Ltd) received more than $600,000 in advice fees from affected customer accounts.

ASIC further alleges that from July 2015 to April 2019, the AMP companies:

  • deducted financial advice fees from 1,540 customers' superannuation accounts despite being aware that the customer had left their employer-sponsored superannuation account and therefore could not access the advice for which those fees were paid;
  • failed to ensure that a system was in place that did not charge customers who had left their employer-sponsored account; and
  • contravened their obligations as Australian financial services licensees to act efficiently, honestly and fairly.

ASIC is seeking declarations, pecuniary penalties and adverse publicity orders to be made by the Federal Court.

This action follows proceedings commenced by ASIC against a number of AMP companies alleging that they had charged life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death.

In response, AMP has acknowledged the commencement of civil proceedings brought by ASIC.

"In 2018, AMP became aware that some AMP Flexible Super members continued to be charged a Plan Service Fee after delinking from their corporate super plan into a retail account," AMP said.

"AMP took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process.

"The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately $900,000 covering fee charged and lost earnings."

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