The corporate regulator filed civil penalty proceedings against AMP in July last year,alleging five companies that were part of the AMP Limited group charged fees to 1500 customers despite being notified they were no longer able to access its financial advice.
AMP has been handed a $14.5 million fine for its fees for no service conduct.Will Willitts
The $14.5 million fine handed down was lower than the $17.5 million the Australian Securities&Investments Commission (ASIC) had argued for,but much higher than the $4.6 million penalty AMP had submitted as being appropriate.
AMP’s share price fell by 2.07 per cent on Tuesday to close at $1.18.
In the judgement handed down on Tuesday,Justice Mark Moshinsky found that between July 2015 and September 2018,AMP deducted $356,188 in fees even though it was aware the affected customers had ceased their employment and could no longer access its advice services.
AMP has paid $691,032 in remediation to affected customers,however the court found the five AMP companies involved - AMP Superannuation,AMP Financial Planning,Charter Financial Planning,Hillross Financial Services and AMP Life - had failed to investigate whether there was a systemic issue,despite repeated complaints.
“It is surprising and concerning that repeated complaints that the[fees] had been wrongly debited from the superannuation accounts ... did not lead anyone within the defendants (in particular,within AMP Life) to question whether there was a systemic issue,” Moshinsky said.
“While it is not suggested that senior management were involved in the contraventions,in my opinion it reflects very poorly on the organisational culture that this type of questioning did not occur,” he added.
ASIC deputy chair Sarah Court said it was an important case and a reminder to superannuation trustees to maintain internal governance and assurance arrangements or face significant penalties.
“What the court has said,in effect,is that these issues,the charging of the fees,should have been picked up a lot earlier than AMP picked them up,that there was a corporate culture problem there,” he said.
“The judge says that there hasn’t been any explanation given by AMP as to why these things took so many years to pick up,particularly in circumstances where it was on notice about complaints coming in for quite some time.”
In a statement,AMP said it acknowledged the court’s decision.
“In 2018,AMP became aware that some AMP Flexible Super members continued to be charged a Plan Service Fee after transferring from their corporate super plan into a retail account. AMP took action to rectify the issue,self-reported it to ASIC,apologised to customers and subsequently completed the remediation of affected members,” the company said.
“The remediation was completed in November 2019,with approximately 2,500 customers being
remediated a total sum of approximately $900,000 covering fees charged and lost earnings. The penalty of $14.5 million handed down today has already been provisioned by AMP in its 30 June 2022 half year financial statements.”
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