Another AMP scandal has come to light. It’s been revealed that AMP—Australia’s largest wealth manager—charged $1.3 million in life insurance premiums to more than 4,500 deceased individuals… after they died.

The company has failed to issue refunds and continues to fail on this measure.

This is the second AMP scandal this year. Earlier in 2018, it was revealed that AMP was involved in a fees-for-no-service issue whereby AMP executives repeatedly lied to regulators about charging customers fees for no service.

AMP Scandal, What Happened?

Paul Sainsbury, AMP’s group executive of wealth solutions and chief customer officer, stood before the Royal Banking Commission today on the current matter. It was revealed that the financial services giant continued charging life insurance premiums, despite being aware that superannuation members had passed away.

Sainsbury told the commission that the company identified 3,124 members who had not been refunded and had been charged approximately $922,000 in additional life insurance premiums.

Errors

The commission was informed that AMP had identified system errors which lead to the continuation of deducting premiums for life insurance from deceased super members accounts. To make matters worse, the company then failed to issue premium refunds even though it had known that the members had died.

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And it seems the issue was brought to light as far back as 2016; the counsel assisting the commission, Mr. Mark Costello, presented internal documents to Mr. Sainsbury. These documents showed AMP had received an internal complaint in that year about its practice of charging insurance premiums to members who it knew had died.

Mr. Sainsbury didn’t argue to matter. When Mr. Costello confronted him with the statement: “There was a better way to do it, which was to stop premiums on death rather than refunding
them. It seems a rather obvious step doesn’t it?”

Sainsbury simply replied: “Yes, it does, It is not the best way, in my opinion.”

The hearing continues, but this AMP scandal will no doubt see the company lose a lot of customers.

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