The Financial Services Authority (FSA) has fined Norwich and Peterborough Building Society (N&P) £1.4 million for failing to give its customers suitable advice in relation to the sale of Keydata products. N&P will make payments to all customers to ensure they do not lose out as a result of their investments. These payments will amount to approximately £51 million.
Over a three-year period, N&P advised 3,200 clients to invest in Keydata’s life settlement products. N&P failed to properly to assess the financial circumstances of many of its customers, showing them as having a higher tolerance of risk than was appropriate. This led to “unsuitable sales.” Many of these customers were approaching or already in retirement, and could not afford to lose their money. N&P co-operated with the FSA’s investigation and agreed to settle at an early stage.