By Max Clarke
Norwich and Peterborough Building Society (N&P) have been landed with a £1.4 million fine for selling Keydata products to 3,200 customers without ‘suitable advice’.
During a period of over three years N&P advised 3,200 clients to invest in Keydata’s life settlement products. N&P failed properly to assess the financial circumstances of many of its customers, designating them as having a higher tolerance of risk than was appropriate. This led to unsuitable sales. Some customers were moved out of low risk products such as deposit accounts into Keydata investments, putting their income and capital at risk. Many of these customers were approaching or already in retirement, and could not afford to lose their money.
“Firms cannot treat customers fairly unless they pay attention to their financial circumstances and attitude to risk when they make recommendations. This is the only way to prevent widespread mis-selling like this,” commented Tracey McDermott, acting director of the Financial Services Authority, who issued the fine.