ASIC has filed charges against Members Equity Bank Limited in the Federal Court, alleging the bank made false or misleading statements. The corporate regulator is also taking action against AMP in the same jurisdiction over fees charged to deceased customers.
The case against ME Bank is being prosecuted by the Commonwealth Director of Public Prosecutions following a referral from the Australian Securities and Investments Commission.
According to a statement from ASIC, the action – which was lodged on 25 May – relates to contraventions of the ASIC Act over false or misleading representations made by ME, and the calculation of penalties for breaches of the National Credit Code over the authorisation of credit representatives.
The alleged offences occurred between 2 September 2016 and 3 September 2018, ASIC said.
ME Bank in a statement said the alleged contraventions “concern home loan customer communications in the period September 2016 to September 2018, and arise from issues that were addressed in 2019.“These issues were reported by ME to ASIC in October 2018. Affected customers were remediated by June 2019. Remediation to affected customers was in the order of $105,000. “ME confirms the matters identified in relation to the home loan customer communications have been addressed and are not ongoing.”
In a busy time for the ASIC legal team, the corporate regulator also announced it has commenced civil penalty proceedings in the Federal Court against five companies that are, or were, part of the AMP Limited group
ASIC has alleged that these entities charged life insurance premiums and advice fees to more than 2,000 customers despite being notified of their death, and failed to put in place systems to ensure this didn't happen in the first place.
The allegations published yesterday by the corporate regulator indicated that AMP companies received over A$500,000 in insurance premiums from the superannuation accounts of deceased customers, with at least $350,000 charged between May 2015 and August 2019.
ASIC has also alleged that the AMP companies received over $100,000 in advice fees from deceased customer accounts, with at least $75,000 being charged between May 2015 and August 2019.
ASIC’s case focuses on the alleged breaches occurring after 26 May 2015 because any breaches occurring before that date are now out of time.
A remediation program was run by AMP in 2019 and 2020 in which more than $5 million was repaid to the estates or representatives of deceased customers.