Aware Financial Services Australia Fined $20M for Charging Fees for No Service

Aware Financial Services Australia Limited (Aware FS), formerly State Super Financial Services Australia Limited (StatePlus), has been ordered by the Federal Court to pay a $20 million penalty for charging over 25,000 customers fees for financial services it did not provide, in contravention of the ASIC Act.

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ASIC Deputy Chair Sarah Court said, '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.'

Between 21 August 2014 and 30 June 2018, Aware FS charged approximately 25,300 customers a total of $50 million in fees for advice services included as part of the superannuation product offered by Aware FS, which at that time was also a superannuation trustee. The firm provided at least 17,500 customers with written disclosure documents advising them that they would receive an annual financial planning review called an Annual Review Service. Another 7,800 customers entered into ongoing advice service arrangements that included provision of an Annual Review Service. However, Aware FS did not provide the promised services.

The Court found that by charging fees for no service and failing to have internal procedures, measures and controls in place to monitor compliance, Aware FS also breached its obligations as an Australian financial services licence holder to act efficiently, honestly and fairly and to comply with financial services laws.

The Court also ordered that Aware FS publish an adverse publicity notice on its website for one year.