Posted on 03 May 2019
Slater and Gordon Lawyers is set to launch a class action against AMP on behalf of over half a million Australians who have been gouged excessive fees on their AMP superannuation accounts.
The firm this week wrote to more than 8000 AMP customers who have registered with the firm outlining the next steps in the proposed class action. The initial claims will focus on excessive fees charged for administering MySuper accounts and the low interest rate members received and fees charged on their cash-only fund options.
Slater and Gordon has reached an in-principle agreement with Therium, a leading litigation funder based in the UK and Australia, to fund the claim.
Head of Class Actions Ben Hardwick said AMP Superannuation Limited, as trustee of the funds, had paid too much to related AMP entities for administration services, rather than taking steps to secure the best deal for members on a commercial arms-length basis.
“MySuper superannuation accounts were intended to be a low-fee and low-fuss account option. This has not proven to be the case here. We will allege that AMP Super breached its obligations by failing to negotiate the lowest fees possible and that, by contracting with AMP Life to administer the funds, it did not manage this conflict of interest and instead put the profits of related entities ahead of members’ interests.”
“This is just the tip of the iceberg; we expect the claim will be expanded beyond MySuper accounts, to include a wider range of excessive fee claims relating to other AMP super accounts,” he said.
“Similarly, the class action will also pursue a claim against AMP alleging that members whose funds were deposited in cash-only investment options were short-changed because they received interest rates far lower than what a reasonable and diligent trustee could have obtained on the open market and were also charged excessive fees.”
The Royal Commission heard evidence of a particular group of AMP cash fund customers who received negative returns due to a combination of an un-competitive interest rate and excessive fees. AMP has since stated that it has taken steps to remediate these customers. The class action will seek to broaden the group of customers that AMP should compensate.
Mr Hardwick said the firm had also written to AMP Limited to seek confirmation that it will honour the commitments it gave during the Banking Royal Commission to meet all of the liabilities of all AMP entities.
Media Contact Therese Allaoui (03) 9602 6844 / 0428 994 937