The Federal Court has handed down its judgment in civil penalty proceedings against AMP Group over the deduction of life premiums and advice fees from the superannuation accounts of more than 2000 deceased customers. 
 
Justice Lisa Hespe ordered AMP Life and AMP Financial Planning to pay a combined penalty of $24 million for their “unconscionable” conduct in a judgment last Friday, bringing an end to the proceedings filed by the Australian Securities and Investments Commission (ASIC). 
 
AMP Life – now owned by Resolution Life Group – was part of the wealth manager’s business when the conduct occurred during the period from May 26 2015 to August 31 2019. 
 
“The contravening conduct involved here is very serious,” Justice Hespe said in her judgment. “There were a large number of affected members over a significant period of time. 
 
“Despite receiving complaints, the systemic nature of the issues relating to the failure to refund remained undetected. Affected members were charged amounts unlawfully.” 
 
Justice Hespe says the lack of oversight and executive management awareness of the issue was part of the problem. 
 
“The culture of the AMP Group assumed no systemic issues,” she said. “It resulted in a failure to have a process in place that was capable of identifying, investigating and remediating systemic issues for many years. The failure reflects poorly on the defendants.” 
 
ASIC commenced the legal action after the conduct was exposed during the Hayne royal commission hearings in 2018. 
 
“This misconduct represents a fundamental breach of trust between a customer and their financial services provider,” ASIC Deputy Chair Sarah Court said. 
 
“The AMP companies had been notified that these customers had died, and despite this, continued to charge premiums and fees on their super accounts.” 
 
AMP Life Limited and AMP Financial Planning admitted that they engaged in unconscionable conduct by deducting and/or failing to properly refund insurance premiums and advice fees respectively from superannuation members after being notified of their deaths. 
 
They also admitted that they accepted insurance premiums and advice fees even though, at the time they received those fees, there were reasonable grounds for believing that they would not be able to supply the insurance or advice. 
 
AMP says the penalty handed down has been fully provisioned for in its financial statements for the year ended December 2022. 
 
“AMP apologises to all beneficiaries of those affected by this matter,” Group General Counsel David Cullen said. 
 
“When we identified the issue in 2018, we reported it to the regulator and worked hard to remediate the estates of affected customers as promptly as possible. 
 
“We engaged constructively with ASIC throughout the legal process, and we acknowledge today’s judgment and the conclusion of the matter.” 
 
He says the business has “made significant changes to our systems and processes in recent years designed to prevent this from recurring”. 
 
Click here for the court judgment.