Aware Financial Services Australia Limited, formerly State Super Financial Services Australia Limited, has been ordered by the Federal Court to pay a fine of $20 million for charging more than 25,000 customers fees for financial services it did not has not provided.

The conduct of Aware FS had been the subject of a case study in the Royal Commission into Misconduct in Banking, Superannuation and Financial Services.

Sarah Court, Deputy Chairman of the Australian Securities and Investments Commission (ASIC), said: “Aware FS charged tens of thousands of customers for financial services it had reason to believe would ‘he wouldn’t be able to provide. As a result, more than $50 million in fees have been charged to customers who have nothing to prove.

“Financial services providers should view the sanction imposed today as an important reminder to maintain strong internal controls and compliance systems. Companies are required to ensure that they only charge consumers for services that If they fail in this obligation, they expose themselves to significant penalties.

Between August 21, 2014 and June 30, 2018, Aware FS billed approximately 25,300 customers a total of $50 million in fees for consulting services included in the retirement product offered by Aware FS, which at the was also a pension trustee.

The court said the company provided at least 17,500 customers with written disclosure materials telling them they would receive an annual financial planning review called the Annual Review Service.

A further 7,800 clients entered into ongoing consulting service agreements which included the provision of an annual review service. However, Aware FS did not provide the promised services.

The court found that by failing to charge for any service and failing to put in place internal procedures, measures and controls to monitor compliance, Aware FS had also breached its obligations as an Australian licensee of financial services (AFSL) to act efficiently, honestly and fairly and to comply with financial services laws.

The court also ordered Aware FS to post an adverse publicity notice on its website for one year.

In rendering his decision, Judge Moshinsky found that Aware FS’s conduct was serious and systematic, with thousands of similar offenses occurring repeatedly over a long period of time.

Judge Moshinsky also pointed to the large number of Aware FS customers affected by this wrongdoing, noting that a $105 million award for this and related conduct was paid.

Aware FS admitted liability and joined ASIC in submitting to the court that a $20 million fine was appropriate.