On Thursday (17 February) ASIC confirmed that Aware, then StatePlu, has been fined $20 million for charging over 25,000 customers fees for financial services it did not provide.
It was found that between 21 August 2014 and 30 June 2018, Aware Financial Services Australia (Aware FS) charged 25,300 customers $50 million in total in fees for advice services. At least 17,500 customers were provided written disclosure documents advising that they would receive an annual financial planning review, while another 7,800 customers entered into ongoing advice service arrangements.
However, Aware FS did not provide the promised services.
“Aware FS charged fees to tens of thousands of customers for financial services it had grounds to believe it would not be able to provide. As a result, over $50 million in fees was charged to customers who have nothing to show for it,” ASIC deputy chair Sarah Court said.
“Financial services providers should treat the penalty imposed today as an important reminder to maintain robust internal controls and compliance systems. Firms are responsible for ensuring they only charge consumers for services they provide. If they fail in this obligation, they face significant penalties.”
The court ruled that Aware FS breached its obligations to act efficiently, honestly and fairly and that Aware publish an “adverse publicity notice” on its website for one year.
Justice Moshinsky added that Aware’s conduct was “serious and systematic”.
Aware has admitted liability and submitted that the $20 million penalty was appropriate.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
