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21-115MR ASIC sues AMP for charging deceased customers
ASIC has commenced civil penalty proceedings in the Federal Court against five companies that are, or were, part of the AMP Limited group, alleging that these entities were involved in charging life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death.
The relevant companies (AMP Companies) are:
- AMP Superannuation Limited;
- NM Superannuation Proprietary Limited;
- AMP Life Limited, which is now owned by Resolution Life NZ, but was part of AMP when the conduct occurred;
- AMP Financial Planning Proprietary Limited;
- AMP Services Limited.
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 commenced this 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.
The proceeding will be listed for a case management hearing on a date yet to be set.
ASIC’s case focuses on the alleged breaches occurring after 26 May 2015 because any breaches occurring before that date are now statute-barred under the law.
Throughout 2019 and 2020, AMP conducted a remediation program in which more than $5 million was repaid to the estates or representatives of deceased customers (including those the subject of ASIC’s case) for wrongfully charging premiums and advice fees to over 10,000 superannuation accounts.
Separately, ASIC has been monitoring remediation for fees for no service (FFNS) failures by financial services institutions including AMP (21-023MR).
This first case management hearing has been listed for Tuesday, 15 June 2021 at 10:15am.
Editor's note 2:
On 15 June 2021, a further case management hearing was set for 12 October 2021.
Editor's note 3:
The case management hearing on 12 Oct 2021 has been adjourned to 2 February 2022.
Editor's note 4:
The case management hearing listed for 2 February 2022 has been adjourned to a date to be determined by the Court after 21 March 2022.
Editor's note 5:
On 10 May 2022, a further case management hearing was set down for a date to be determined in July 2022 and the trial for 12 December 2022.
Editor's note 6:
A case management hearing has been set for 19 July 2022.
Editor's note 7:
On 29 June 2022, the case management hearing set for 19 July 2022 was vacated and relisted for 16 August 2022.