N&P Keydata victims offered £2m in interest-free loans

Norwich & Peterborough (N&P) Building Society is offering victims of failed investment vehicle Keydata £2m in interest-free loans until the end of the year.

The Society recommended Keydata products to its members and is now putting aside £2m to help 1,600 customers who have seen their income dry up after Keydata went into administration last year.

Its advice arm sold a range of products from Keydata Investment Services to about 3,500 people, with investments ranging from £5,000 to more than £100,000.

N&P has investors in Keydata Secure Income Bond 3, Keydata Secure Income Bond 4, Keydata Secure Income Plan, Keydata Income Plan, Keydata Income Plan 2 to 12 and 14, and Keydata Defined Income Plan 5 year Special Editions 2 to 8.

Last month, the Financial Services Compensation Scheme (FCSC) said it had paid 90% of claims relating to investments in the Keydata Secure Income Bond issues 1, 2 and 3.

Of the 5,000 Keydata customers who have so far submitted a claim for compensation, the scheme says it has been able to issue decisions on over 4,400, with 90% of those resulting in compensation payments.

However, it admits a number of outstanding claims, which require detailed investigation.

N&P chief executive Matthew Bullock says: "A number of our savers are clearly strapped because income from investments has been cut off since January and it is taking much longer than we thought to sort out.

"We are offering 1,600 customers interest-free loans they can draw down from until the end of the year. Then we will have to take another look."

Bullock adds: "I don't know what the take-up will be, but this is just the right thing to do."

He defended N&P's decision to recommend Keydata to customers, saying the company had completed proper due diligence.

However, hundreds of its customers caught up in the debacle are to join together in a legal challenge against N&P over alleged mis-selling.

Gareth Fatchett, partner at Regulatory Legal, has offered to bring a group action against the building society on a no-win-no-fee basis in the hope of retrieving 100% of his clients' savings.

Meanwhile, six investors have joined forces to create pressure group Norwich and Peterborough Victims, which has started a petition and will lobby MPs over the scandal.