Norwich and Peterborough building society fined £1.4m and massive compensation pay out after fleecing old people
Norwich and Peterborough building society have had their arses well and truly spanked by the Financial Services Authority (FSA), fining them £1.4m and asking them to pay out £51m in compensation after being found guilty of the "widespread mis-selling" of complex investment products to old people.
The FSA said that N&P failed in the most basic duty of providing suitable advice to customers who lost cash when investing in products with now-collapsed investment company Keydata Investment Services after getting obviously bad advice from N&P's staff.
Around 3,200 people were advised to invest in Keydata products, but weren't properly assessed, which led to unsuitable sales, according to the FSA said. With the average age of the affected customer being at 62 and having little in the way of investment experience, the FSA decided to kick some arses.
"Some customers were moved out of low-risk products such as deposit accounts into Keydata investments, putting their income and capital at risk," said the FSA. "Many of these customers were approaching or already in retirement and could not afford to lose their money."
Tracey McDermott, the FSA's 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 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. This is the only way to prevent widespread mis-selling like this."
In stupider news, N&P are looking at a merger with the Yorkshire Building Society, potentially leaving them all Yorkshire Norwich And Peterborough Building Society, leaving most customers dead before they've even finished saying which society they belong to.