Australia’s infamous financial services firm AMP has been ordered by the Federal Court to pay a $14.5 million fine for charging hundreds of customers fees for services they couldn’t receive.
ASIC filed civil court cases against AMP in July last year, claiming that 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. This week a Federal Court judge stated that the company’s failure to check for systemic issues within its ranks a blot on its corporate culture.
The $14.5 million fine handed down was slightly less than the $17.5 million the Australian Securities & Investments Commission (ASIC) initially requested, but much higher than the $4.6 million penalty AMP had submitted as being appropriate.
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.
“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.”
“In 2018, AMP became aware that some AMP Flexible Super members continued to be charged a Plan Service Fee after transferring from their corporate super plan into a retail account. AMP took action to rectify the issue, self-reported it to ASIC, apologised to customers and subsequently completed the remediation of affected members...
The remediation was completed in November 2019, with approximately 2,500 customers being remediated a total sum of approximately $900,000 covering fees charged and lost earnings.”