FSCS to recoup Keydata compensation paid to N&P customers
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Norwich & Peterborough Building Society is to repay the Financial Services Compensation Scheme for payments the scheme has already made to N&P customers who invested in Keydata products.
Money for the FSCS payments will come out of the £57m provision set aside by N&P to pay Keydata Lifemark investors.
The FSCS says it is “considering” what this means for levy payers. IFAs contributed £93m out of a total industry levy of £326m to pay for FSCS claims relating to Lifemark investments bought through Keydata.
The building society announced that it had set aside up to £57m to pay Keydata investors earlier today.
An N&P spokeswoman says: “We will be repaying the FSCS and the balance will go to customers.”
She adds that while the majority of N&P customers have already sought redress through the FSCS, some may have claims over the £48,000 limit and therefore would be eligible to claim through N&P.
The society is writing to Keydata investors inviting applications for ex gratia payments to transfer rights to the investment to N&P.
Payments to customers will see the return of the original investment plus interest.
A spokesman for the FSCS says: “We confirm the FSCS is in discussions with N&P about the compensation costs of Keydata Investment Services relating to the building society. This is in relation to investors who have already been compensated by the FSCS.”
He says N&P’s decision is a positive development for both N&P members who invested in Keydata funds and for levy payers.
He adds: “We are considering what it means for levy payers and will liaise with the relevant trade organisations on the issue.”
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Readers' comments (7)
Barry | 22 Mar 2011 1:41 pm
Doe's that mean we will all get a refund of the 2 payments we have had to pay ??????? or will they do some silly maths calc, that will mean we get maybe a partial reduction in the next years bill, now don't think to long on what the correct answer will be, but they should think long and hard on what to do and hopefully think of 3 words TCF
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David Parkinson | 22 Mar 2011 1:50 pm
If as a result of N & P's action £57 million has been over collected through the levy then surely this is simple.
FSCS repays to levy payers a pro rata refund.
No doubt the over complicaters in our business will shoot me down though!
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Michael Fallas | 22 Mar 2011 1:52 pm
My guess is no refund will be made but it will reduce any levy etc for this year.
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Evan Owen | 22 Mar 2011 2:17 pm
PI insurers, hello, anybody there?
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Hugh Jeego | 22 Mar 2011 3:33 pm
I confidently predict that if there is any refund allowed it will not reach advisers as fast as it was sequestered from us in th first place!
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Richard Salter | 23 Mar 2011 4:28 pm
We must not get too excited. FSCS has paid out claims up to £48,000. Those who incredulously invested far more with Keydata were losing until N&P has come up with this ex-gratia offer. It does not mena that £57 million comes off the FSCS books - only the first £48k the FSCS has paid out to investors. My guess is that this will absorb only say one third of the affected N&P investors in Keydata - so returning only £19 million to the FSCS. The balance of the £57 million from N&P , around £34 million will then be used by N&P to buy back the investors failing holdings in life assurance policies.
Advisers will not see the FSCS bill reduced by £57 million and thus expect a pound for pound reduction in our levies - on this basis only a third of the £57 million will go to the FSCS and (possibly) be used to reduce the levies already paid........
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Carol Scholes | 21 Sep 2011 6:15 pm
If N&P would have had the decency to reply to worried enquiries from myself and other investors we would not have had to engage solicitors at great expense. We have all ready lost a lot of our savings and I think this is an immoral and deceitfull act by N&P, plus they have renaged on their agreement with their investors such as myself.
Any comment from investors that will be as angry as I am.?
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