The AMP Ltd (ASX: AMP) share price will be one to watch closely on Thursday morning.
This follows the release of an announcement this morning.
What did AMP announce?
According to the release, AMP has been hit by civil proceedings brought by ASIC in the Federal Court. This is in relation to alleged breaches concerning the deduction of life insurance premiums and advice service fees from the superannuation accounts of deceased customers.
ASIC further alleges that the AMP companies’ conduct demonstrated a system of conduct or pattern of behaviour that was, in all the circumstances, unconscionable.
The release notes that in 2018, AMP identified issues with its processes regarding deceased customer accounts and self-reported this to the regulator. The matter was later covered in the Financial Services Royal Commission.
Since then, AMP has taken action to change its processes and policies to address these issues. It has also remediated all impacted customer accounts. In total, the company has remediated 10,155 customer accounts with a sum of A$5.3 million for the period from 2011 to 2019, which included compensation for lost earnings. The remediation was completed in May 2020.
AMP’s Group General Counsel, David Cullen, commented: “AMP has taken this matter very seriously and we will now carefully consider the allegations raised by ASIC. We have been assisting ASIC with its investigation and will continue to engage constructively as part of the legal process.”
“When we discovered the issues, we immediately moved to change our processes and systems and took action to ensure the beneficiaries of customers impacted were fully remediated. AMP apologises to all customers and beneficiaries who were impacted by this matter,” he concluded.
The AMP share price has been out of form this year. It is down 32% year to date and trading within a whisker of a record low.