Australia's AMP fined $16 million for charging fees to deceased clients
Reuters
Published May 18, 2023 08:55PM ET
Updated May 18, 2023 11:20PM ET
(Reuters) -Troubled Australian wealth manager AMP (OTC:AMLTF) Ltd will pay a court-mandated penalty of A$24 million ($16.3 million) for billing dead clients for insurance and financial advice, effectively drawing the curtains to a scandalous saga dating back to 2018.
The allegations first came to light when a public inquiry exposed systemic wrongdoing at the company, including charging fees for advice that was never given, taking insurance premiums from the accounts of dead clients and conspiring at the board level to deceive regulators.
These revelations rocked the firm - leading to the exit of its chairperson and CEO, clients fleeing in troves and the company's market value shrinking.
The Federal Court has found four companies that are or were part of the AMP Group in breach of the law when charging life insurance premiums and advice fees from the superannuation accounts of more than 2,000 deceased customers, the country's corporate regulator Australian Securities and Investments Commission (ASIC) said on Friday.
Two of these companies - AMP Life and AMP Financial Planning were ordered to pay a combined penalty of $24 million for the breaches.
"Customers, and their beneficiaries, expect financial services providers to have the proper systems in place to ensure, once notified, deceased customers are no longer charged. These systems were inadequate, and customers were let down," said ASIC Deputy Chair Sarah Court.
"This misconduct represents a fundamental breach of trust between a customer and their financial services provider."
The penalty handed down was fully provisioned for by the company in its financial statements for the year ended Dec. 31, 2022. Shares of the firm were up 0.7% at A$1.0875.
"AMP apologises to all beneficiaries of those affected by this matter. 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," AMP Group General Counsel David Cullen said.
($1 = 1.4743 Australian dollars)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.