AMP was fined $16 million for billing deceased customers. AMP Ltd. (AMP.AX) will pay a court-mandated penalty of A$24 million ($16.3 million) for invoicing dead clients for insurance and financial advice, ending a scandal that began in 2018.
A public probe revealed pervasive fraud at the company, including billing fees for advice that was never delivered, receiving insurance premiums from dead clients, and collaborating at the board level to deceive authorities.
The firm’s chairperson and CEO resigned, clients fled, and its market value plummeted after these discoveries.
On Friday, the Australian Securities and Investments Commission (ASIC) announced that the Federal Court found four AMP Group companies violating the law for charging life insurance premiums and advice fees from over 2,000 deceased customers’ superannuation accounts.
The breaches cost AMP Life and AMP Financial Planning $24 million.
“clients, and their beneficiaries, expect financial services providers to have the right mechanisms to ensure that deceased clients are no longer charged once notified. “These systems failed customers,” stated ASIC Deputy Chair Sarah Court.
“This misconduct represents a fundamental breach of trust between customers and their financial services provider.”
The company fully provisioned for the penalty in its financial statements for the year ended Dec. 31, 2022. As a result, the stock rose 0.7% to A$1.0875.
“AMP apologizes to all affected beneficiaries. “We reported the issue to the regulator in 2018 and worked hard to remediate the estates of affected customers as quickly as possible,” AMP Group General Counsel David Cullen said.
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