‘Concerning’ conduct: AMP fined $14.5 million over fees for no service
AMP has copped a $14.5 million fine for charging hundreds of customers fees for services they couldn’t receive, with a Federal Court judge labelling the wealth manager’s failure to check for systemic issues within its ranks a blot on its corporate culture.
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.
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.
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