GLOBAL SUB-PRIME CRISIS

BANKILEAKS

Click on our Secret Library of Evidence ------>

    BANKILEAKS Secret Library

Loan Application Forms (LAF's)  

    Bank Emails to Brokers  

    Then Click on 'VIEW NOTEBOOK'

Join us on facebook
 

facebook3           facebook2 

BFCSA
MORTGAGE
DISTRESS SOS

What BFCSA Does...

BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

Visitors

Articles View Hits
549496

Whistleblowers' Corner!

To all mortgage brokers, BDMs and loan approval officers! 
Pls Call Denise: 0401 642 344 

"Confidentiality is assured."

Cartoon Corner

Lighten your load today and "Laugh all the way to the bank!"

Denise Brailey

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

Click on the Cluster Map.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Login
    Login Login form

BFCSA: How ASIC closed in on AMP’s ‘orphan’ customers ASIC Propaganda

Posted by on in From My Window
  • Font size: Larger Smaller
  • Hits: 132
  • 0 Comments
  • Print

How ASIC closed in on AMP’s ‘orphan’ customers

The Australian 12:00am July 16, 2018

Pamela Williams

 

The key document that sparked AMP to commission Clayton Utz last year to investigate its “fees for no service” scandal was already in the sights of the corporate regulator before the consultancy’s ­report was ever completed and handed to the AMP board.

This explosive AMP internal document, which became known at the corporate regulator as the “orphan contracts document”, five years ago canvassed the ­severe risks for AMP if it did not cease charging fees on so-called “orphan policies” where clients had no financial adviser.

The Australian Securities & Investments Commission was sharply tightening its focus on AMP last year with demands for historic paperwork after several years of investigating AMP and big banks over fees for no service.

The formal demand from ASIC for all records relating to the orphan contracts document was sent to AMP before the Clayton Utz report was given to AMP’s board on October 16 (and hand-delivered by chairman Catherine Brenner to ASIC as a courtesy) — suggesting that perhaps ASIC already had whistleblowers.

Emails and documents uncovered by The Australian show the orphan document was part of a sweep by ASIC when AMP general counsel Brian Salter wrote to Clayton Utz partner Nick Mavrakis on October 11 last year while Mr Mavrakis was still finishing the Clayton Utz report.

Mr Salter emailed: “You’ll see from the attached that ASIC has issued a section 33 notice, for, amongst other things, all records relating to the above document, (the FOFA Practice Proposition Stream Orphan Contracts Policy and Process Changes & Recommendations) which it has defined as the Orphans Contract Document. You will recall that it was the existence of this document (as well as the legal advices) that led to the CU investigation.”

The orphan contract document — dated 20 June 2013 — had warned under the heading “Risks and Issues” of potential reputational damage to AMP of continuing to charge fees while providing no service in return.

More importantly, the document warned of the legal and compliance issues of charging fees for no service “for any period of time”. The legal and compliance issues flagged in the document could include “breach of contract, and breach of general ­licensee obligation to act ­efficiently, honestly and fairly”.

The Clayton Utz report has been swept up in controversy over allegations in the royal commission into banking misconduct that it was not “independent”, following evidence that numerous changes and clarifications had been requested by AMP lawyers and the chairman.

Mr Salter’s email to Mr Mavrakis on October 11, 2017, five days before the Clayton Utz report went to the board, asked Mr Mavrakis to conduct further searches to substantiate Clayton Utz’s findings that the Orphan Contracts document had never been “sent” to anyone within the company, and had never been finalised (and thus had no formal standing).

Mr Salter continued: “This document is dealt with in paragraph 25 of the CU report where Clayton Utz concludes: “We have not located evidence that this document was actually sent, and the consensus amongst the interviewees was that it was never ­finalised.”

Mr Salter’s email was released in a trove of exhibit documents by the royal commission into banking misconduct, along with the orphan contracts document itself. The document listed more than 40 managers and executives on its distribution list, however the version made public in the royal commission was not signed off and Clayton Utz concluded it was never “sent”.

Mr Salter wrote: “Nick can you please list the searches and other materials that you base these conclusions on. We will need to do this to convince ASIC that the document did not have any formal or other official standing in the organisation. Can we please have this by COB tomorrow as I want to understand how strong our case is regarding the status of this document as we formulate our strategy for the next phase of engaging with ASIC.”

The rest of the email was redacted for legal privilege. But it was clear that the orphan contracts document was vital. Not only had this document triggered the 2017 Clayton Utz investigation when it was discovered (in ­response to earlier ASIC notice demands), but ASIC wanted all records relating to the document.

The author of the orphan contracts document was former AMP business analyst, Brian Magellan.

According to data on the front of the document, Mr Magellan had created several versions ­between May 20 and June 20, 2013. A copy of the document lodged with the royal commission this year was the fifth version. Mr Magellan’s work on the AMP fees for no service issue continued through 2013.

By November 2013, Mr Magellan had left AMP.

Mr Magellan was not interviewed by Clayton Utz, which noted in its final report to the AMP board: “We have attempted to contact him without a ­response.”

The 2013 document was one of a string of reports AMP had prepared for the new Future of Financial Advice reforms intro­duced by the Labor Government in 2012. The orphan contracts document was 22 pages of analysis of the types of fees for no service AMP’s financial planning arm and divisions were engaged in, and the impact of the FOFA reforms.

The June 2013 document had concluded more than 12,000 customer contacts had been impacted by the fee for no service issues.

ASIC has continued to press AMP hard in recent months for further information on the ­orphan contracts document.

ASIC complained to AMP in a letter on 14 March this year that AMP had failed to produce relevant material that related to the FOFA Program Steering Committee of which former AMP CEO Craig Meller was “recorded as being the Sponsor and Business Owner, and which appears to have overseen the work of ­various FOFA project streams”.

Clayton Utz concluded in its report on fees for no service that Mr Meller had no knowledge of the “90-day exception” (whereby AMP kept clients in certain buckets for three months while charging them fees for no service), or any knowledge of “ring-fencing” (another practice), and had not seen any legal notices about these issues.

Mr Meller resigned in April this year after a week of uproar over fees for no service in the royal commission. He was managing director of AMP Financial Services in 2013. On March 18, 2013, he was the author of a signed letter to Treasury officials in Canberra responding to the government’s FOFA reforms.

 

Last modified on
Rate this blog entry:
0

Comments