ASIC sues AMP over $600k fees-for-no-service super debacle
ASIC is suing several AMP entities over fees for no service charged on corporate superannuation accounts.
The regulator has commenced civil proceedings in the Federal Court against six companies that are, or were at the time of the conduct, part of the AMP Limited group. The conduct is said to have taken place between July 2015 and April 2019, involving AMP Superannuation, AMP Life (now Resolution Life NZ), AMP Financial Planning, AMP Services, Charter Financial Planning and Hillross Financial Services.
It is alleged the misconduct saw AMP pocket more than $600,000 in financial advice fees from 1540 customers despite having been notified that those customers had left their employer-sponsored super accounts and therefore could not access the financial advice for which the fees were charged.
ASIC further alleges that AMP failed to ensure a system was in place to ensure customers that had left those super products wouldn't be charged advice fees, and that the group also contravened obligations as an AFSL to act efficiently, honestly and fairly.
In a statement, AMP acknowledged the proceedings and said it became aware in 2018 that some AMP Flexible Super members continued to be charged fees after delinking their corporate super plan into a retail account.
"AMP took action to rectify the issue, self-reported it to ASIC, and commenced a remediation process," AMP said.
That remediation program saw about $900,000 refunded to impacted members and was completed in November 2019.
ASIC is seeking declarations, pecuniary penalties and adverse publicity orders to be made by the court.
As at December 31, 2020, AMP had paid $154 million in remediation for fee-for-no-service conduct to about 207,000 clients. It has also paid about $34 million for non-compliant advice to 2289 clients.
This is just the latest in a long line of run-ins with the regulator for AMP, with this action following another announced in May in which ASIC alleges several AMP companies continued to charge financial advice fees and life insurance premiums to more than 2000 customers after they had passed away.
AMP did have some reprieve earlier this month however, with the regulator confirming it was dropping a criminal investigation related to the group's Buyer of Last Resort Policy and the way in which AMP continued to charge orphaned advice clients despite having no adviser.
This article first appeared on Financial Standard
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