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AMP slapped with ASIC suit

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    The Australian Securities & Investments Commission (ASIC) has taken five companies to court, accusing them of charging insurance premiums to over 2,000 deceased customers.

    The firms facing civil penalty proceedings in the Federal Court include AMP Limited companies AMP Superannuation Limited, NM Superannuation Proprietary Limited, AMP Financial Planning Proprietary Limited, and AMP Services Limited.

    Also being sued is AMP Life Limited, which is now owned by Resolution Life Group but was part of the AMP group when the alleged conduct supposedly occurred.

    The regulator’s allegation is that from May 2015 to August 2019, each of the companies did one or more of the below.

    deducted life insurance premiums from the superannuation accounts of 2,069 deceased customers despite being notified of their death

    deducted financial advice fees from the accounts despite being notified of customers’ death

    failed to ensure that a system was in place that ensured that it did not charge deceased customers

    failed to ensure that a system was in place to manage conflicts of interest between the companies’ interests in continuing to charge premiums and advice fees and members’ interests in premiums and advice fees ceasing after death

    contravened their overarching obligations as Australian financial services licensees to act efficiently, honestly, and fairly

    The watchdog wants declarations of contraventions of the ASIC Act and Corporations Act, and is also seeking pecuniary penalties and other orders to be made by the Federal Court. The case focusses on alleged breaches occurring after May 26, 2015, as breaches prior to that date are now statute-barred under the law.

    “ASIC further alleges that the AMP companies’ conduct demonstrated a system of conduct or pattern of behaviour that was, in all the circumstances, unconscionable,” stated the regulator.

    “ASIC alleges that 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.”

    As for the advice fees, the firms supposedly received more than $100,000 from deceased customer accounts.

    The case management hearing is yet to be scheduled.

    Original Article