Norwich and Peterborough fined for miss selling to pensioners
A significant penalty of £1.4m has been issued to Norwich and Peterborough building society soon after The Financial Services Authority found that the building society hadn’t supplied proper guidance to 3,200 buyers, which had been primarily pensioners, who had been sold dangerous investment merchandise.
The original service provider of these investments, Keydata, ended up being shut down by way of the FSA in ‘09 and administrators ended up being assigned in June 2009 at that time 30,000 UK individuals were confronting a loss of £450m.
Keydata supplied the high risk polices for the building society that the Financial services authority uncovered to be incorrect, the fine occurs soon after the building society of late agreed to pay out damages to its buyers who brought in to the investments adding up to £51m. The building society apologised and explained they will repay their buyers back “Capital plus interest.” In all the compensation will cost Norwich and Peterborough £57m which happens to be far more than ten times its 2010 pre-tax revenue.
The FSA’s acting enforcement director Tracey McDermott has said:
“N&P failed in its basic duty to provide suitable guidance to its buyers, despite an internal compliance report pointing out that there had been problems as early as 2007,”
“Firms cannot treat buyers fairly unless they pay attention to their monetary circumstances and attitude to risk when they make recommendations,”
Norwich and Peterborough building society is in talks about being absorbed by the Yorkshire Building Society soon after this episode, Norwich and Peterborough’s chief executive Matthew Bullock stepped down in March.
The Serious Fraud Office still is analyzing the operations of Keydata.
