ASIC, Financial Planning, Insurance

ASIC moves on AMP over deceased client fees

AMP fees deceased customers

ASIC has started legal action against five AMP companies in regards to claims they charged advice fees and insurance premiums to dead customers.

The Australian Securities and Investments Commission (ASIC) has commenced legal action against five companies that have been part of the AMP Limited Group, alleging they charged deceased clients insurance premiums and advice fees.

The corporate regulator commenced civil penalty proceedings in the Federal Court after its investigation found more than 2000 customers were allegedly charged life insurance premiums and advice fees despite the companies being previously notified of the clients’ deaths.

ASIC alleged that from May 2015 to August 2019, the relevant companies charged at least $350,000 in insurance premiums and a minimum $75,000 in advice fees, all from deceased customer accounts. In total, the regulator claimed the AMP companies received more than $600,000 in insurance premiums and advice fees from deceased clients.

The AMP companies involved in the action are AMP Superannuation Limited, NM Superannuation Proprietary Limited, AMP Life Limited (now part of Resolution Life Group), AMP Financial Planning Proprietary Limited and AMP Services Limited.

During the same period, ASIC further alleged the AMP companies were aware of the deceased customers, yet continued to deduct life insurance premiums from 2069 superannuation accounts and deduct financial advice fees.

A remediation program was conducted by AMP throughout 2019 and 2020 in which more than $5 million was repaid to the estates or representatives of deceased customers, including those the subject of ASIC’s case, after the company wrongfully charged more than 10,000 superannuation accounts.

The corporate watchdog stated it is seeking declarations of contraventions of the ASIC Act and Corporations Act and pecuniary penalties against the related AMP companies, but a date is yet to be set for the proceedings.

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