(Reuters) – Wealth manager AMP Ltd was handed a penalty of A$14.5 million ($9.74 million) on Tuesday by Australia’s Federal court for charging customers with ‘fees for no service’ on their corporate pension accounts.
The Australian Securities and Investment Commission (ASIC) had alleged in 2018 that companies related to the wealth manager charged fees from customers despite being notified that they were no longer able to access the advice.
Between July 2015 and September 2018, AMP entities deducted A$356,188 in fees even though they were aware that the members had ceased their employment and could no longer receive advice services, the court found.
AMP had acknowledged the claims and said it self-reported the issue to the regulator in 2018 and provided remediation to affected customers in November 2019.
“Although AMP has remediated A$691,032 to affected customers, the court found AMP failed to investigate whether or not there was a systemic issue, despite many complaints over a lengthy period of time,” ASIC said.
The penalty received on Tuesday has already been provisioned in the 2022 half-yearly financial statement, AMP said.
“Superannuation trustees should treat the penalty imposed today as an important reminder to maintain robust internal governance and assurance arrangements,” ASIC Deputy Chair Sarah Court said.
AMP has been embroiled in scandals surrounding its practices and corporate culture, including allegations that five related companies charged life insurance premiums and advice fees to more than 2,000 customers after their deaths.
A Royal Commission inquiry in 2018 found that the 172-year-old firm engaged in “unconscionable” conduct and Australia’s biggest banks broke laws when providing financial advice.
(This story refiles to correct currency in third and fifth paragraphs to A$)
($1 = 1.4890 Australian dollars)
(Reporting by Harish Sridharan in Bengaluru; Editing by Dhanya Ann Thoppil and Subhranshu Sahu)