East Anglia: Norwich & Peterborough Building Society offers compensation to Keydata investors
THOUSANDS of investors who lost money on investments sold to them by the Norwich & Peterborough Building Society are to share in a �57million compensation fund.
The society said it would make ex gratia payments to 3,200 customers who took out policies with collapsed investment firm Keydata Investment Services between 2005 and 2009 after receiving advice from the building society’s staff.
N&P said the move, covering the sums lost by investors and interest, had been approved by City regulator the Financial Services Authority and the Financial Services Compensation Scheme.
It said it would be writing to customers, most of whom are based in Suffolk, Norfolk, Cambridgeshire and Lincolnshire, inviting them to submit applications.
N&P chairman Gordon Horsfield said yesterday: “The society has been deeply concerned for its customers who have suffered following Keydata’s failure and is very sorry for the hardship and anxiety that has occurred.”
A number of N&P customers who were sold Keydata policies and claim they were not warned about the risks associated with the products have been planning legal action against the society.
A number of investors are understood to have lost five- or six-figure sums which, in some cases, represented their entire savings.
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The compensation provision put a large dent in the society’s annual results which were also published yesterday.
It reported an underlying profit of �5.1million for 2010, up from �1.3m the previous year, but this turned into a loss of �48.9m with allowance for the compensation payout taken into account. The society also saw its total income fall, from �52m in 2009 to �50.08m, with the closure of 10 branches as part of a cost-cutting drive contributing to a fall in customer numbers.
N&P, which is currently in talks over a merger approach from the larger Yorkshire Building Society, has decided to stop offering financial advice and instead to act as an introducer insurer Aviva.