AMP sued by regulator for charging fees to dead people

The nation’s oldest wealth company has been hit by another court action for charging premium fees to dead people.

Beleaguered financial group AMP has been hit by another legal action for charging insurance premiums to dead people.

The Australian Securities and Investments Commission has launched proceedings against the wealth group in the Federal Court for more than 2000 cases where deceased customers were charged life insurance premiums and advice fees.

ASIC claims the nation’s oldest wealth company contravened its obligations under its financial services licence and demonstrated a pattern of “unconscionable” behaviour.

It alleges AMP knew of the conduct and did not try to fix the issue of superannuation accounts continuing to be charged once the member had died.

From May 2015 to August 2019, ASIC alleges 2069 dead customers were charged financial advice fees and life insurance premiums.

ASIC has launched legal proceedings against AMP for charging fees to dead people. Picture: Hollie Adams/ The Australian.

The regulator said AMP failed to implement a system to manage accounts and was not acting in the best interests of members.

ASIC says $500,000 worth of insurance premiums were taken off superannuation accounts from deceased people, with at least $350,000 occurring between May 2015 and August 2019.

A further $100,000 was raked in by the group in advice fees over the period.

“ASIC commenced this proceeding because licenced financial services companies need to have robust compliance systems to ensure they meet their legal obligations to customers,” the regulator said in a statement.

“Customers, and their beneficiaries, should have confidence that they will be correctly and lawfully charged for any financial services or products.”

AMP allegedly raked in $500,000 in premiums. Picture: Hollie Adams/ The Australian

The revelations of AMP charging dead people were uncovered in the banking royal commission after the group identified the issue and self-reported.

In a statement, AMP acknowledged the civil proceedings lodged by ASIC and said it had already undertaken a remediation process.

AMP general counsel David Cullen said the group was taking the issue seriously and assisting ASIC in its investigations.

“When we discovered the issues, we immediately moved to change our processes and systems and took action to ensure the beneficiaries of customers impacted were fully remediated,” Mr Cullen said.

“AMP apologises to all customers and beneficiaries who were impacted by this matter.”

The wealth group claims 10,155 affected customers between 2011 and 2019 have been refunded $5.3 million.

ASIC is suing the following AMP companies:

• AMP Superannuation Limited
• NM Superannuation Proprietary Limited
• AMP Life Limited, now part Resolution Life NZ but was part of AMP when the conduct occurred.
• AMP Financial Planning Proprietary Limited
• AMP Services Limited

Originally published as AMP sued by regulator for charging fees to dead people