Wealth manager AMP (OTC: AMLTF) Ltd was slapped with a fine that was A$14.5 million ($9.74 million) on Tuesday by the Australian Federal Court for charging its customers with ‘fees without service on its corporate pension account.
The Australian Securities and Investment Commission (ASIC) was able to prove in the year 2018 that businesses linked to the wealth management firm demanded charges from clients despite being not informed that they are no longer able to get the advice.
Related: Australia’s AMP was fined $9.7 million for breaking rules about fees.
Between July 2015 and September 2018, AMP entities deducted A$356,188 in fees despite the fact that they knew that members had quit their jobs and were no longer eligible for advice as the court determined.
AMP acknowledged the allegations and acknowledged that it had reported the problem before the regulator back in 2018 . AMP the company offered a remedy to customers in November of this year.
“Although AMP has remediated A$691,032 to affected customers, the court found AMP failed to investigate whether or not there was a systemic issue, despite many complaints over a lengthy period of time,” ASIC stated.
The penalty imposed on Tuesday was already set aside in the 2022 half-yearly financial statements, AMP said.
“Superannuation trustees should treat the penalty imposed today as an important reminder to maintain robust internal governance and assurance arrangements,” ASIC Deputy Chair Sarah Court said.
AMP has been involved in scandals over its business methods and culture of business, such as allegations that five of its subsidiaries have charged life insurance premiums and advisory fees for more than 22,000 clients following their deaths.
An Royal Commission inquiry in 2018 revealed that the 172-year-old business was involved in “unconscionable” conduct and Australia’s most prestigious banks violated the law in providing financial advice.
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(This story is a refile to the correct currency in the third and fifth paragraphs , converting to A$)
($1 = 1.4890 Australian dollars)