AMP escapes ASIC charges for ‘fees for no service’ scandal

“ASIC’s investigation related to suspected criminal conduct regarding the charging of fees for no service in relation to the BOLR policy in breach of section 1041G (prohibition on dishonest conduct) of the Corporations Act 2001 (Corporations Act),” ASIC said.

“ASIC also investigated AMP Financial Planning for breaches of section 1308(2) (prohibition on making misleading statements) of the Corporations Act in relation to this conduct. No further action will be taken on these matters.”

The decision to finalise the investigation comes following consultation with the Commonwealth Director of Public Prosecutions (CDPP). 

In one of the revelations of the 2018 banking royal commission, it was revealed clients of these retiring advisers were placed into a pool and charged fees without receiving advice.

The scandal involved an arrangement known as the buyer of last resort or “BOLR” scheme, under which AMP would buy the practices of retiring financial planners if no other buyers could be found.

The regulator said it has been conducting investigations into fees-for-no-service conduct by entities within the AMP Limited group, including the BOLR policy conduct which resulted in two briefs of evidence being referred to the CDPP in mid-2020. ASIC’s investigations into other allegations of fees-for-no-service conduct within the AMP Limited group are continuing.

“The CDPP has now determined, on the basis of the available evidence and weighing the relevant public interest factors, that no charges should be brought for that conduct,” ASIC stated. 

ASIC has conducted a number of investigations into alleged civil contraventions by entities within the AMP Limited group. Civil penalty proceedings were commenced in the Federal Court in May 2021 against five companies that are, or were, part of the AMP Limited group for allegedly charging fees to deceased customers.

The regulator commenced engagement with the CDPP in April 2019, referring a detailed pre-brief of evidence regarding section 1041G of the Corporations Act (prohibition on dishonest conduct) to the CDPP at the end of that month.

ASIC said it continues to prioritise enforcement investigations and remediation for consumers arising out of fees-for-no-service conduct, which, as at 31 December 2020, had seen Australia’s largest banking and financial services institutions pay, or offer to pay, $1.24 billion in compensation. AMP has paid over $153 million to over 200,000 customers as of that date.