UPDATE
The Federal Court has ordered two AMP companies to pay a penalty of $24 million for charging dead customers life insurance premiums and advice fees. An Australian Securities and Investments Commission (ASIC) media release said two thousand deceased customers were impacted.
“The AMP companies had been notified that these customers had died, and despite this, continued to charge premiums and fees on their super accounts,” said ASIC Deputy Chair Sarah Court.
The release said the AMP companies received over $500,000 in insurance premiums from the accounts.
The release said both AMP Life Limited and AMP Financial Planning admitted that they engaged in “unconscionable conduct by deducting and/or failing to properly refund insurance premiums and advice fees respectively from superannuation members after being notified of their deaths.”
The Court found that four companies that “are or were part of the AMP Group” breached the law. Two of the firms did not receive a civil penalty: AMP Superannuation Limited and NM Superannuation Proprietary Limited.
In handing down the decision, Justice Hespe described the conduct as “very serious, wrongful behaviour.” The Justice said “the deceased members affected were vulnerable, obviously unable to monitor their accounts and were entirely reliant on the representatives of their estates.”
The release also said that throughout 2019 and 2020, AMP conducted a remediation program. More than $5 million was repaid to the estates or representatives of deceased customers - including those in this ASIC case - for wrongfully charging premiums and advice fees to over 10,000 superannuation accounts.
Story Update
AMP has acknowledged today’s Federal Court decision and released a statement on the Australian Securities Exchange (ASX).
The statement said AMP identified “issues with its processes regarding deceased customer accounts” and self-reported to the regulator in 2018.
“AMP apologises to all beneficiaries of those affected by this matter,” said AMP group general counsel David Cullen (pictured above). “When we identified the issue in 2018, we reported it to the regulator and worked hard to remediate the estates of affected customers as promptly as possible.”
The statement said the penalty handed down in Federal Court today was fully provisioned for by AMP in its 2022 end of year financial statements.
“We have made strong progress in becoming a customer-focused and purpose-led organisation, and this historical matter is not reflective of the AMP we are today,” said Cullen. “We have made significant changes to our systems and processes in recent years designed to prevent this from recurring.”
Sydney headquartered AMP has operations in Australia and New Zealand.
