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AMP still taking fees from the dead
The Australian 12:00am September 18, 2018
Ben Butler, Michael Roddan
Scandal-ridden wealth giant AMP continues to charge dead people for life insurance, even after being told the customer has died, the banking royal commission has heard.
The nation’s fifth-biggest financial services group discovered in April it was slugging the dead, after launching an investigation when CBA admitted similar sins to the commission.
Yesterday’s admissions by AMP’s head of wealth management, Paul Sainsbury, made it the third financial services group after NAB and CBA whose graveyard sting has been exposed by the royal commission.
AMP was also put through the wringer for charging superannuants higher life insurance premiums after wrongly assigning them status of “smoker”, and failing to give the customer enough opportunity to correct the record.
Mr Sainsbury’s admissions join other shockwaves from the commission, with NAB’s head of wealth, Andrew Hagger, resigning after a disastrous performance in the witness stand, former AMP chairman Catherine Brenner losing her last corporate directorship and the corporate regulator launching legal action against Dover Financial, an advisory business headed by Terry McMaster, who collapsed while giving evidence in April.
Mr Hagger, a 10-year NAB veteran, will effectively be replaced as top customer officer by former NSW premier Mike Baird.
Ms Brenner, who was forced out of the wealth manager’s boardroom after the royal commission revealed the company had misled the corporate regulator more than 20 times over its fees-for-no-service scandal, yesterday stood down from the board of Boral. It was her last boardroom bolthole after also leaving the board of Coca-Cola Amatil.
The inquiry yesterday heard insurance group Allianz misled the Australian Securities & Investments Commission and failed to report a serious breach to the regulator — both of which are criminal breaches of the law — while the insurer’s witness, Michael Winter, was put on notice by commissioner Kenneth Hayne that his legal team may have misled the commission.
AMP was exposed as ignoring concerns from staff members about the practice of charging dead people fees, which it shrugged off in favour of aiming to refund life insurance premiums once it paid out.
AMP’s Mr Sainsbury, admitted the financial services group knew it had been charging life insurance fees to dead customers since 2016.
AMP believed it had fixed the problem, but launched a fresh review of its practices, which discovered it must now refund more than $1.3 million in wrongly charged life insurance premiums to more than 4600 dead customers, after the CBA revelations.
The company told the Australian Prudential Regulation Authority and ASIC about some of its problems in June, but Mr Sainsbury said it had yet to tell the regulators of the full extent of the fees charged to the dead.
Mr Sainsbury conceded that the conduct fell below community standards and expectations, but did not agree that AMP had failed to comply with laws requiring it to act efficiently, honestly and fairly.
