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N&P payout £28k in first successful Keydata claim
18 August 2010
An elderly couple caught up in the Keydata collapse have become the first Norwich and Peterborough (N&P) customers to successfully claim the building society mis-sold products, exposing them to "inappropriate risk". A ruling from the Financial Ombudsman Service (FOS) recommends N&P repays the couple's £28,000 investment plus interest, because flaws in the building society's advice "exposed their capital to an inappropriate level of risk", the Eastern Daily Press reports. The FOS' provisional judgement - the first of its kind in this case and still open to an appeal from the building society - states: "I do not believe that [the customers] would have invested in this product had they been fully aware of the risks." It adds: "Bearing in mind they were both retired and there is no evidence of them investing before they met the advisers, it seems unlikely they would have been willing to accept the risks inherent in the Keydata income plan fund, especially at this stage of their life." Gareth Fatchett, partner at Regulatory Legal, which represents about 200 N&P customers, says the case echoed that of the majority of people caught up in the Keydata collapse and could open the floodgates to more successful cases. He adds: "The adjudication is emphatic and we cannot see it being overturned on appeal. Our client group will be lodging their claim for redress on the same basis in early September. More than 3,500 pensioners invested in Keydata products following consultation with N&P independent financial advisers. Keydata was forced into administration last June and is now being investigated by the Serious Fraud Office (SFO). Thousands of pensioners have lodged or are preparing similar claims against the building society following the collapse of Keydata. Most have life-savings ranging from £5,000 to £100,000 tied up in products from Keydata, after acting on advice from N&P IFAs. Alison Rolls, spokeswoman for the N&P, says bosses were currently considering the ruling. "We are taking this matter very seriously and welcome complaints from customers. "We are working with the FSA, the FOS and the Financial Services Compensation Scheme (FSCS) to ensure complaints are all dealt with in a co-ordinated way, so a solution can be found for everybody, as soon as possible." Consumers do not have to accept FOS decisions and can instead go to court but, if they do accept it, it is binding on both them and the business. North Norfolk MP Norman Lamb and Norwich North MP Chloe Smith are among those campaigning for answers from the FSA over the failed investment firm. Both say the judgement would provide encouragement for those who fear they may never get their money back, but said pressure on the FSA and FSCS must continue. Published by IFAOnline
