AMP fined $24 million for charging thousands of dead people
AMP has been fined $24 million for charging more than 2000 dead people life insurance premiums and advice fees, a scandal that was first aired in 2018 during the Hayne Royal Commission into the finance sector.
On Friday, the Federal Court ordered AMP Life and AMP Financial Planning to pay fines of $18 million and $6 million respectively after they admitted to the "unconscionable conduct" of charging and failing to refund the funds charged to accounts after they'd been told of their clients' deaths between 2015 and 2019.
"The AMP companies received over $500,000 in insurance premiums from the superannuation accounts of deceased customers, with at least $350,000 charged between May 2015 and August 2019," a statement from the Australian Securities and Investments Commission (ASIC) said.
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"Additionally, the AMP companies received over $100,000 in advice fees from deceased customer accounts, with at least $75,000 being charged between May 2015 and August 2019."
Two other AMP entities – AMP Superannuation and NM Superannuation – were also found to have broken the law in regards to charging dead customers, but were not hit with any civil penalties.
AMP has also been ordered to publish a written notice outlining its conduct and the fines it was handed on its website for at least a year.
"The AMP companies had been notified that these customers had died, and despite this, continued to charge premiums and fees on their super accounts," ASIC deputy chair, Sarah Court said.
"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.
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"This misconduct represents a fundamental breach of trust between a customer and their financial services provider."
AMP's conduct was one of the more shocking revelations of the Hayne Royal Commission, leading to the resignation of both chairperson Catherine Brenner and CEO Craig Meller.
Between 2019 and 2020, it paid back $5.2 million to 10,155 accounts that had been wrongfully charged premiums and advice fees.
In an apology, AMP's general counsel insisted the company had changed its ways since the scandal emerged.
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"AMP apologises to all beneficiaries of those affected by this matter," David Cullen said.
"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.
"We have made strong progress in becoming a customer-focused and purpose-led organisation, and this historical matter is not reflective of the AMP we are today.
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"We have made significant changes to our systems and processes in recent years designed to prevent this from recurring."
AMP Life is now part of the Resolution Life Group, but was under AMP when the offences occurred.
AMP Group said today's fines were fully provisioned for in its financial statements for 2022, and, as of 2pm, the company's share price had increased by just over one per cent.
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