Australian Securities and Investments Commission v AMP Superannuation Limited [2023] FCA 488

Australian Securities and Investments Commission v AMP Superannuation Limited [2023] FCA 488

The defendants' conduct in deducting and failing to refund life insurance premiums and advice fees from deceased members' superannuation accounts was unconscionable in all circumstances and contravened ss 12CB(1) and 12DI(3) of the ASIC Act 2001 (Cth). The failures arose from inadequate systems and monitoring, with particular concern regarding the vulnerability of deceased members' estates. Declarations of contravention were justified and appropriate pecuniary penalties were $18 million for AMP Life and $6 million for AMP Financial Planning.

Parties
Plaintiff: Australian Securities and Investments Commission; First Defendant: AMP Superannuation Limited (ACN 008 414 104); Second Defendant: NM Superannuation Proprietary Limited (ACN 008 428 322); Third Defendant: AMP Financial Planning Pty Limited (ACN 051 208 327); Fourth Defendant: AMP Life Limited (ACN 079 300 379); Fifth Defendant: AMP Services Limited (ACN 081 143 786)
Jurisdiction
Australia
Judgment Date
19 May 2023
Procedural Posture
Civil Penalty Proceeding / Final Judgment and Penalty Orders
Outcome
Declarations made as proposed; AMP Life and AMP Financial Planning ordered to pay pecuniary penalties; orders for adverse publicity notice; costs awarded to ASIC; application against Fifth Defendant dismissed with no order as to costs.
Legal Topics
Unconscionable Conduct, Civil Penalties, Superannuation, Remedies – Pecuniary Penalties, Financial Product Advice, Breach of Licensee Obligations
Corporations Law Financial Services Law Unconscionable Conduct Civil Penalties Superannuation Remedies – Pecuniary Penalties Financial Product Advice Breach of Licensee Obligations

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Parties

Australian Securities and Investments Commission

Plaintiff

AMP Superannuation Limited (ACN 008 414 104)

First Defendant

NM Superannuation Proprietary Limited (ACN 008 428 322)

Second Defendant

AMP Financial Planning Pty Limited (ACN 051 208 327)

Third Defendant

AMP Life Limited (ACN 079 300 379)

Fourth Defendant

AMP Services Limited (ACN 081 143 786)

Fifth Defendant

Procedural Posture

Civil Penalty Proceeding / Final Judgment and Penalty Orders

Legal Issues

  1. 1 Whether defendants engaged in unconscionable conduct by deducting life insurance premiums and advice fees from deceased customers' accounts
  2. 2 Whether defendants contravened ss 12CB(1) and 12DI(3) of the ASIC Act 2001 (Cth)
  3. 3 Whether defendants breached general obligations under s 912A of the Corporations Act 2001 (Cth)

Ratio Decidendi

The defendants' conduct in deducting and failing to refund life insurance premiums and advice fees from deceased members' superannuation accounts was unconscionable in all circumstances and contravened ss 12CB(1) and 12DI(3) of the ASIC Act 2001 (Cth). The failures arose from inadequate systems and monitoring, with particular concern regarding the vulnerability of deceased members' estates. Declarations of contravention were justified and appropriate pecuniary penalties were $18 million for AMP Life and $6 million for AMP Financial Planning.

Court Disposition

Declarations made as proposed; AMP Life and AMP Financial Planning ordered to pay pecuniary penalties; orders for adverse publicity notice; costs awarded to ASIC; application against Fifth Defendant dismissed with no order as to costs.

Orders

  • AMP Life to pay pecuniary penalty of $18,000,000 to the Commonwealth of Australia within 30 days for contraventions of ss 12CB(1) and 12DI(3) of the ASIC Act.
  • AMP Financial Planning to pay pecuniary penalty of $6,000,000 to the Commonwealth of Australia within 30 days for contraventions of ss 12CB(1) and 12DI(3) of the ASIC Act.