What companies drew ASIC’s attention in 2023? Part 1

Throughout the past year, some of Australia’s biggest firms have caught the attention of the Australian Securities and Investments Commission (ASIC) for a variety of reasons. Here are some of the most prominent moves that the regulator took in the first half of 2023.

Mercer

In late February, ASIC commenced civil penalty proceedings in the Federal Court against Mercer Superannuation (Australia) for allegedly making misleading statements about the sustainable nature and characteristics of some of its super investment options.

“This is the first time ASIC has taken an Australian entity to court regarding alleged greenwashing conduct, and it reflects our continuing efforts to ensure sustainability-related claims made by financial institutions are accurate,” ASIC deputy chair Sarah Court said.

Mercer is expected to pay a penalty of $11.3 million in this greenwashing case.

Meanwhile, in November, the court ordered Mercer Financial Advice (Australia) Pty to pay a $12 million penalty after being found to have failed in its fee disclosure obligations and charging fees to customers it was not entitled to charge.

ANZ

In March, ANZ was penalised $10 million by the Federal Court in relation to its Home Loan Introducer Program, which involved home loan referrals to ANZ from third party ‘introducers’ from various professions, including cleaners and real estate agents.

The court found that between March 2017 and March 2018, ANZ contravened consumer credit protection laws by accepting information and documents in support of 50 home loan applications from unlicensed third parties who were not licensed to engage in credit activity.

Additionally, in September, ANZ was ordered to pay a $15 million penalty after it admitted to misleading customers as to the funds available to them in certain credit card accounts.

The court found that ANZ breached the ASIC Act and the National Consumer Credit Protection Act by falsely indicating that customers could obtain a cash advance from funds shown to be their “Available Funds” without incurring fees and interest.

Finally, in December, ANZ was ordered to pay a $900,000 penalty for breaching its continuous disclosure obligation during a $2.5 billion institutional share placement in 2015.

Future Super

ASIC issued super fund promoter Future Super with an infringement notice in May this year as part of the regulator’s ongoing action against alleged greenwashing.

The regulator said it was concerned that a Facebook post published by Future Super in 2019 may have been false or misleading by overstating the fund’s positive environmental impact.

“The post on the Future Super Fund Facebook page overstated the positive environmental impact of the fund and we were concerned it may be misleading to investors and potential investors,” Ms Court said.

“This action should send a message to the financial services industry that ASIC is continuing to focus on greenwashing broadly, in statements to the market, disclosure documents, marketing material and on social media.”

AMP

Also in May, the Federal Court concluded proceedings brought against AMP by ASIC in relation to contraventions concerning the deduction and retention of life insurance premiums and advice service fees from the super accounts of deceased customers.

The court ordered that AMP Life and AMP Financial Planning be issued a total monetary penalty of $24 million.

“The AMP companies had been notified that these customers had died, and despite this, continued to charge premiums and fees on their super accounts,” Ms Court noted.

“Customers, and their beneficiaries, expect financial services providers to have the proper systems in place to ensure, once notified, deceased customers are no longer charged. These systems were inadequate, and customers were let down.”

MLC Life

In another judgement handed down in May, the Federal Court ordered MLC to pay a $10 million penalty for failing to pay promised benefits resulting from a lack of appropriate systems to administer its insurance policies

The court also made declarations that MLC Life contravened the ASIC Act, the Corporations Act and the Insurance Contracts Act over a number of failures.

“Customers should be able to trust that their insurer will pay the benefits promised to them and keep them properly informed if there are changes to their policies,” Ms Court said.

“The failings recognised by the court are the result of poor governance, poor controls and poor systems, such as legacy IT systems. MLC customers deserve to have their insurance policies administered properly.”

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.