As promised, I am posting the letter to AMP, as I got a reply
from them today telling me to fuck off that I am a dickhead
for taking it out in the first place [so Frank, I expect to 
have that money after all, but only $4200]...



4th August, 1995.

General Manager,
AMP,
PO Box 300,
Parramatta,
NSW 2124.

Dear Sir,
         I would like to make a complaint about one of AMP's scams,
er, I mean funds.  Specifically the "Investment Linked Plan".  My
policy number is H5119539-A.  When I took out my policy (with
Lisa Athansoff), it was explained to me that I had an initial 
obligation to buy 1 year's worth of units, and then I could stop 
contributing if I wanted to.

As it turns out, that's exactly what happened, my circumstances
changed and I no longer wished to contribute.  That's fine.
However, the way my investment increased was markedly different
to what was being advertised in your fund performance brochure.
I rang up my new "adviser", Norma Armitage, and she gave me the
usual rubbish about shares being down at the moment, you've got
to look at the long term, and when I finally pinned her down and
said "I'm not worried about the performance per se, I'm worried 
about my investment not matching the published figures", she
finally capitulated and explained that my first year's contributions
performed at 5% less than the published figures, and to go and
check my policy document.

Indeed, it does say that in the policy document, and it's quite
unfortunate that the glossy story I was told did not give such
prominence to this fact, otherwise I wouldn't have touched it
with a barge pole.  Basically what this amounts to is a 5%
commission is deducted from my investment EVERY YEAR.  With the
lump sum premium (which I also took out, and am about to close
down also, though only because I hate AMP, not because there's
anything scammy about it), I could understand the once-off 5%
commission.  But having 10 bites at the same cherry is such a
gross rip-off it is amazing that the trade practices commission
doesn't close you down.

Of course, once I realised this, I wanted to get my money out,
but you've thought of that too, and have an obscene charge of
up to 35% of your contributions if you pull out early.  So
much for the "withdraw at any time".

I agree with Norma, I am a "foolish young man".  I have been very
badly burnt by your organization, and intend to warn anyone who
crosses my path about it, including a financial magazine (a letter
which I shall write shortly).  People should be warned about scams 
like this.  Here is a summary of my dealings with various AMP people:

1. Lisa either didn't know (most likely), or neglected to mention 
the 5% EVERY YEAR ripoff.

2. Norma admits the 5% ripoff, but assures me that Lisa would have
"certainly" pointed that out to me, she is very reliable.

3. I speak to someone else from AMP customer service, on another
inquiry, and I mentioned the scammy plan, and he said "yuk, you're
better off putting your money in the bank and then taking out one
of the bonds".

4. Another AMP lady tries to get me to go into one of those plans,
and I tell her that it is a complete ripoff, that the first year's
contributions perform at 5% less than the advertised rate.  She
doesn't believe me, as she's never heard about that.

5. Someone (possibly one of Norma's offsiders) rings me up a few
years later to ask me if I am happy with my investment, and I tell
him that I am not happy with a complete scam like that, and explain
why, and he suddenly gets awfully worried, because he's got his own
money in there.  I then settle him down explaining that the subsequent
year's contributions are not a scam, and it should come out in the
wash, but that doesn't alter the fact that the first year's 
contributions are a complete scam.

6. I come to realise that even with the obscene withdrawal-ripoff,
it may well be better for me to cut my losses and get out early.
So I ring up the AMP info line, and because I already had a policy,
I was actually put through to Norma's office.  I wanted to know
what the percentages were in the last few years of how much of the
policy's value I got.  I was told there was no percentages, there
was no withdrawal charge.  I said there was, and that I wanted to
know what they were.  She said she obviously didn't know the answer,
and would get Norma to give me a call.

7. A couple of days later I got the jack of AMP altogether, and
decided to close down both policies.  I asked your info line to
send me out the forms.  An hour later I got a call from Norma, and
asked her what the percentages were, and she said that she didn't
know, they don't have that sort of information, only actuaries did.
It is incredible that despite x years in the business (with x >= 6),
that someone who's flogging these scammy deals can't answer a simple
enough question like that.  Anyway, I went through the literature I
had from AMP, because I know I have seen them listed before, and it
was in my policy document, and the magical figures that only I plus
the actuaries know, are after 6 years, I get 82.3%, 7 = 86.4%, 8
= 90.7%, 9 = 95.2%, 10 = 100%.

I have since realised that 5% for 4 years is as bad as 20% up-front,
and I'm going to be equally ripped off, so I may as well take my
money now.  I am going to be closing my other policy largely because
I hate AMP, and partly because I think I can make the money perform
better than AMP.

In short, I can half-forgive AMP for selling insurance bonds to 
someone who has a wife that isn't earning any money (I know a hell
of a lot more about money than I did when I was 22), I can 
forgive AMP for performing in the bottom 25% of fund managers, as
that is simply the luck of the draw, but what I cannot forgive is
a policy that is so greedy that it takes a 5% commission every
year instead of once-off, and I cannot forgive half of the AMP
agents not even being aware of this fact (do a survey yourself),
and I cannot forgive the fact that only the actuaries know what
the percentages in the policy are.

I have not yet spent the time to investigate super funds, which is
the only reason I'm not shutting my super fund down too.  When I
do, that will be the last dealing I will ever have with AMP.
Comparing my $10,000->$13,683 with the $5200->$4308, I calculate
that I am losing 5200/10000*13683-4308 = $2807.  That's a HELL of
a lot of money, and I hope the sharks have a real nice feed on
that.


                     Yours sincerely,
                     
                     
                     
                     
                     
                     (Paul Edwards)



P.S. I have decided that it is only fair to AMP to give you the
right of reply.  After say 20/08/95 I intend to write letters to
the Trade Practices Commission, Consumer Affairs, a couple of
financial magazines, The Investigators and A Current Affair.  I
will be stressing the example of someone who contributes for a
year and then decides to close the account down, and that while
I can understand a 5% management charge, I cannot see any
justification for a 35.5% management charge, which is what is
levied in this example.
@EOT:

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