AMP hit with $14 million penalty

The five AMP companies involved in the case are:

AMP Superannuation Limited;
AMP Financial Planning Proprietary Limited;
Charter Financial Planning Limited;
Hillross Financial Services Limited; and
AMP Life Limited (now part of the Resolution Life Group, but was part of AMP when the misconduct occurred).

The court found that between July 2015 and September 2018, the AMP companies deducted a total of $356,188 in fees. They later admitted to the court that they were aware the members had ceased their employment and could no longer access the advice service.

Although AMP has remediated $691,032 to affected members, the court ruled that the company failed to investigate the possibility of a systematic issue, despite receiving many complaints for a long time.

Read more: ASIC review identifies gaps in life insurance industry practices

In handing down his decision, Justice Moshinsky emphasised that AMP’s conduct was grave and systemic, leading to contraventions that repeatedly occurred over an extended period.

He added: “In relation to ‘corporate culture,’ I consider that the failure to investigate whether or not there was a systemic issue, despite many complaints, over a lengthy period of time, reflects very poorly on the defendants (in particular, AMP Life).”

ASIC Deputy Chair Sarah Court commented: “AMP was aware it was charging fees for no service to these members, but did not take the proper steps to prevent it from continuing. AMP admitted liability regarding these failures and admitted it did not have the proper systems and compliance arrangements in place to ensure the payments ceased when members left their employer.”

The Court warned superannuation trustees to treat the penalty as a reminder to maintain robust internal governance and assurance arrangements.

“Trustees are responsible for ensuring they only deduct fees from member accounts for services actually provided. If they fail in this obligation, they could face significant penalties,” she added.

The court also ordered AMP to publish an adverse publicity notice on its websites for one year. Meanwhile, another financial advice and superannuation provider was recently hit with a hefty fine after some of its representatives “failed to act in their clients’ best interests.”