Norwich and Peterborough building society fined £1.4m and massive compensation pay out after fleecing old people

18 April 2011

norwich peterboroughNorwich 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 bastards.

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.

TOPICS:   Banking   Investments   Government   Economy

6 comments

  • smashingnicey
    Call me cynical n all, but they don't look like a huge building society and it almost seems like they've been caught out when the bigger companies are simply smarter and wiser with how they fleece their customers. Still, let's be honest here, it's a good win for the consumer. If unusual.
  • oliverreed
    Greedy cunts should have read the small print
  • James E.
    Same shit, different day! More commission generated than other products so, let's be "more professional" i.e. sell the product with the biggest commission. Fuck 'em, I hope they've sacked all of the "sales managers" who will have driven this miserable event and then got rid of the Directors who would have been crowing over their best ever sales results.
  • William H.
    Should be an interesteing AGM on Wednesday, but would you believe it Mathew Bullock who was Chief Executive for 12 years and presided over The Keydata affair resigned and left on the 31st March 2011 and Mike Hounsell The Marketing and Sales Director left at the end of Febuary. They both had salary in excess of £200,000, it makes one wonder did they both get golden handshakes. One would be correct to think that neither of thse people will be at the AGM on the 26th April, so they will escape questioning by the shareeholders. This building Society has been wrecked by idiots, it was not money that they had earned that they have been throwing away, but the Shareholders. I am a Shareholder, its doubtbul if I will recieve anything for my share when the N and P is merged. One wonder will be in fact be given shares in Yorkshire. To be honest it STINKS just a little.
  • norwich
    I used to work for N&P and the sales push on these products was substantial and prolonged. There were some pretty upset people visiting the branches when they realised their money had disappeared!! The last AGM I attended was hijacked by some very pissed off shareholders who were trying to get their money back. N&P were stalling at that point but since I left the FSA have enforced the fines. the regional sales managers are all quaking in their boots now most of the board have 'retired' or resigned William Higginson is correct in that it has been wrecked by idiots; quite simply they got greedy and at the same time as Keydata were pushing additional insurance products onto customers to boost the income stream. Interestingly there was staff speculation about them being take over well over a year ago when Keydata first came up; it was suggested the massive push on insurance selling was being used to make the books look good ahead of a buyout
  • David E.
    Norwich and Peterborough will have a new chief executive from 20 April 2011. The previous one Matthew Bullock got total pay of £343,000 at year end 31 December 2009. The chief executives for the Yorkshire, Barnsley and Chelsea Building Societies are just one person; Iain Cornish, though he is retiring soon. Why does N&P need its own chief executive when it joins (as is probable) this group? Looks like jobs for the boys/girls.

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