Lost Super Because Provider Changed Account Holders Address without Authorisation
Last edited 13/06/2019 - 11:51
Asking for a friend, that friend is my Mum, and I've actually submitted the complaint on her behalf, but you know - a friend. Basically i wanted to rant somewhere, and looking for opinions. Apologies for the long story, but its worth a read.
Mum had a number of active super accounts in the early 2000's, and requested for one of them to consolidate. They missed one, because the address on that account was changed 1 year earlier to some random address (not my mums doing, but provider A are arguing it was), and only realised it was missed 10 years later when notified by ATO of lost super. As a result, mum has paid $7k in fees to this provider, and lost roughly $14k of investment income had it have transferred over to Provider B. The provider A won't admit their fault and has made a good will gesture to refund half the fees paid during the term.
- My mother had a super account, we'll call it "Provider A" with attached Life Insurance policy opened in the early 90's.
- In 2005 mum made a phone call to withdraw $X to pay for something
- In 2006, mum started a new job with a health care company, and was required to open a superannuation account with Provider B. Mum was prompted to, and completed required paperwork to transfer all other super accounts from previous providers (she had a few, who doesn't!)
- In 2016 mum received a letter from the ATO advising of a lost super account, with Provider A.
- Mum called Provider A, which they advised yes she still has an account, but her address is different to what she gave them. Somewhere over 1000km away from where mum has lived for ~40 years. Mum and Dad have owned and lived in the same house from 1983 to 2018, and have never lived elsewhere, nor advised anyone of a change of address (until they removed into their new home in 2018).
- Provider A advised mum that on the same day she withdrew $X, she also changed her address. The address is changed on our system on the same day, so you must have changed it. They cannot provide a voice recording because it was forever ago. All statements were sent to this new address,
- Mum immediately transferred the balance from Provider A to Provider B.
Basically, Provider B didn't find the super account with Provider A, because the address differed to those provided by my mother. Mum didn't check with the new provider to make sure each of the previous accounts were transferred over, she probably should have - but like 90% of Australians, she didn't completely understand super, and isn't super financially literate. However she never received any annual statements from any of the previous providers after that date, so assumed (incorrectly) that they were all transitioned across.
As a result, mum's money remained in the account with Provider B, growing at <3% (terrible investment product), and having extremely high insurance premiums being taken out (between $400 in 2005 to $2000 in 2016, yep it grew at 20% p.a. during this time, because every year it went up, the letters advising of the change were sent to the new address). Anyway, the closing balance in 2016 was significantly lower than the balance in 2005.
We have complained to Provider A, asking for at least the premiums paid over that time to be refunded (~$7k), on the basis we didnt know the account was still open as mum never received any statements, as they changed her address. They argue that Mum must have changed the address, they wouldn't have changed it otherwise, and therefore it's her fault.
I have calculated, if mum had have moved the balance of that super into Provider A, the FV, less the PV, after the investment returns is approx $14k, thats the amount mum has lost because Provider A changed her address.
In addition, according to RP data, the address that Mum's account was changed to, the ownership changed within a couple of months of when mum "changed her address" with Provider A. I've provided this information to Provider A. We believe the person who owned this property also has/had an account with and called Provider A to change their address, and they accidentally changed mum's profile instead
Since then, we've made a complaint to the Super Complaints Tribunal, and Provider A has made an offer of half the premiums paid in this time ~$3,500, as a gesture of goodwill, as no-one can prove mum didnt change her address, so they won't admit fault. Note - mum doesnt even know the town that the address was changed to, so theres no way she could have, let alone would have changed her address to there. They have argued that mum should have followed up that all accounts were transferred, so she has to take some ownership, which i agree - however as she never received another statement, she was deprived of any future opportunity to rectify the missed account, which she undoubtedly would have done if she received her annual statement from Provider A in 2006.
Anyway, i've rejected their offer of $3,500, and are standing by the full $14,000.
Does the crowd think our claim is justified, or should we accept their gesture of good will?
32Yes, push for the full $14k, Provider A has clearly made an error
10No, accept the $3,500 good will gesture - both parties fault
2Mum fully at fault, go home mum
23I didnt want to read the wall of text.