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N&P fined for mis-selling Keydata products

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by Kay Mitchell
N&P fined for mis-selling Keydata products

The Financial Services Authority (FSA) has today announced that it has fined the Norwich and Peterborough Building Society (N&P) £1.4 million for giving unsuitable advice on its Keydata products.

The Watchdog said the group failed to properly assess the financial circumstances of many of its customers and often designated them as having a higher tolerance of risk than was appropriate.

N&P, which is Britain’s tenth largest society, will also have to repay more than £50 million in compensation to customers who were sold the product.

N&P sold Keydata products from 2005 but it was placed into administration in 2009, with 30,000 UK investors facing the loss of £450 million.

The collapse of Keydata represents the largest investment failure the Financial Services Compensation Scheme (FSCS) has dealt with.

Gordon Horsfield, chairman of N&P, 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.

“Our aim in making ex-gratia payments is to put that right and we are very sorry for the hardship and anxiety that they have suffered.”

The news of the fine comes just one month after it emerged that Yorkshire Building Society is in talks with N&P which could lead to an acquisition.

The announcement comes after much consolidation in Britain’s mutual sector, as a result of funding pressures.

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News posted: April 18, 2011

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