FOS rules against Norwich & Peterborough over Keydata

The Financial Ombudsman Service (FOS) has ruled that Norwich & Peterborough Building Society must pay out a claim for £28,000 relating to its sale of a Keydata Lifemark product.

A report in the Eastern Daily Press says the FOS has ruled that Norwich & Peterborough failed in its advice to an elderly couple which “exposed their capital to an inappropriate level of risk”.

The provisional judgment is still open to appeal by the building society.

The judgment says: “I do not believe that (the customers) would have invested in this product had they been fully aware of the risks.”

“Bearing in mind that they were both retired and there is no evidence of them investing before they met the advisers, it seems unlikely that they would have been willing to accept the risks inherent in the Keydata income plan fund, especially at this stage of their life.” (article continues below)

Michael Cotter, a consultant at Regulatory Legal, says: “Although this relates to the Norwich & Peterborough Building Society and their advice on the Lifemark product it has ramifications for any IFA with clients in these funds. The current position with the FSCS means that if no resolution is reached for investors in September 2010 then investors are inevitably going to look at the initial advice.”