Norwich and Peterborough customers celebrate Keydata fine
Norwich and Peterborough customers who invested life savings in the collapsed Keydata investment
fund are celebrating victory after the building society was fined �1.4m for mis-selling.
The announcement by the Financial Services Authority (FSA) brings to an end an 18-month ordeal for thousands of East Anglian pensioners who feared they had lost their life-savings.
Over a three-year period N&P financial advisors sold 3,200 clients life settlement products which were thrown into doubt when Keydata was forced into administration.
Despite accusations that it mis-sold products by failing to warn customers of the risks involved, building society bosses denied any wrong-doing.
But yesterday the FSA delivered a damning verdict, saying the N&P had continued to sell Keydata products despite concerns expressed by its own compliance team.
Tony Hall, from Downham Market, is a founder of the N&P Victims Group. He said: 'This is a victory for us all. We have said all along that we were mis-sold products and this vindicates that argument. Now all we need is the money back in the bank and we can put this sorry affair behind us.'
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The N&P has already announced it will refund all of those involved - amounting to �51 million in total. It also made interest free loans to tide over those caught up in the collapse.
Tracey McDermott, FSA acting director of enforcement and financial crime, said: 'N&P failed in its basic duty to provide suitable advice to its customers, despite an internal compliance report pointing out that there were problems as early as 2007.
'Firms cannot treat customers fairly unless they pay attention to their financial circumstances and attitude to risk when they make recommendations.'
The judgement states that the N&P failed to properly assess the financial circumstances of many of its customers, designating them as having a higher tolerance of risk than was appropriate. Some customers were moved out of low risk products such as deposit accounts into Keydata investments, putting their income and capital at risk.
The N&P has also agreed to commission an independent review of sales of other financial products and will pay redress where appropriate. N&P chairman Gordon Horsfield said: 'The society is committed to its members and has been deeply concerned for those customers who bought these products and who lost out following Keydata's administration in 2009.'