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Topics: Norwich and Peterborough| Keydata
Norwich & Peterborough Building Society (N&P) will be fined by the FSA within weeks for the systematic mis-selling of risky Keydata investments, according to reports.
The building society will also be forced to undergo a review of all past business in the New Year because of advice failings, according to a source close to the situation.
Such action by the regulator would fuel speculation that N&P, which has 500,000 members, may not survive as an independent building society, reports the Daily Mail.
N&P confirmed last week it had received "a number" of approaches from other financial organisations.
Its board has consistently maintained the society is financially strong enough to weather the Lifemark crisis.
The bonds were sold during 2006 and 2007 by advisers working from N&P branches. About 3,100 people invested a total of £50m.
Following the collapse of Keydata in June 2009 and the subsequent placing of Lifemark into provisional administration, it emerged N&P salesmen had given consistently poor advice.
They appeared to have systematically underplayed the risks and in many cases encouraged people to invest all of their savings.
N&P refused to comment on whether it would face a fine, but it confirmed discussions with the FSA were continuing.
An N&P spokeswoman said: "We are acutely aware that people are waiting to learn how their complaints will be resolved. We're doing everything we can."
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Must it always take so long?
While the vultures flock to the feeding frenzy there is an interminable silence from the regulators, these vultures make money from the misery of the poor 'customers' whose trust has been abused by the same firm which squirms for months on end while issuing press statements and responses to complaints which are quite clearly misleading.
Posted by: Exasperated Me
I will be watching
AS N&P have no money to pay fines just customers. No doubt the managers and directors will all walk away clean and be ready to repeat it all again. They were on the brink and selling keydata "saved" them. But now looks like they are going to be merged away and everyone will move on with only the customer facing the loss and of course those IFAs left standing who face a ever mounting FSCS levey.
Posted by: Mr Fisher
Yet another inept Board of Directors
How many members of the Board of N&P actually knew anything about delivering advice at Point of Sale ?? Or anything about the complexities of the KEYDATA products ? I have not got the time to analyse their separate biographies but it is very likely there are the usual assembly of career politicians who have manouvered their way to the Board room and have not got the slightest idea of the risks associated with these products and the risks to their customers. Do they care ? NO ! But I expect they really would care if their Grannie or Aunty had been mis-sold such a product from one of their own branches ....then what would have happened ? We really need a way to prevent yesterdays men from attaining such influential positions.
Posted by: Roger
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Systematic mis-selling
It should be of no great suprise to anyone working in financial services that N&P were involved in systematic mis-selling. There is a culture within the banking industry which treat customers as targets for anything they can sell to and while the banks claim thier sales force are not paid commission the banks receive the commission usually negotiated with the provider at an increased rate. They then issue internal guidance to their sales force on which products to sell. As long as the FSA & the Treasury are in support of the profits the banks make, they will allow such malpractices to continue. The FSA, Treasury executives and bankers all move within an inner circle of careers within the industry so don't expect any changes on how things are run.
Posted by: Alan Thompson