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Lincoln fined £485k for misselling savings plans

Lincoln Assurance has been fined £485,000 for misselling practices at its former direct salesforce, City Financial Partners, three years ago.

Despite having disposed of the now defunct City Financial in October 2000, Lincoln has been penalised for misselling savings plans to consumers between 1998 and 2000.

The provider has already set aside £8.8m compensation for 5,000 out of 28,000 investors who were found to have been victims of misselling when their cases were reviewed. It is hoping to have all reviews completed by the end of April.

The FSA&#39s predecessor, the PIA, visited Lincoln in 1998 and 1999 and identified that CFP was inappropriately selling its maximum investment plan and maximum savings plan to consumers.

Many of the sales were to investors under age 35. The FSA says the problems occurred because CFP sold its savings plans when there were more suitable products such as Isas available.

The Consumers&#39 Association, which has long been lobbying for a wide-ranging review of CFPL&#39s sales practices, has welcomed the move.

FSA managing director Carol Sergeant says: “It is a key requirement that recommended products must be suitable for the customer&#39s individual circumstances. This fine demonstrates the seriousness with which we view breaches of this requirement and our commitment to ensuring that customers will be properly compensated.”

Lincoln managing director Michael Tallett-Williams says: “Lincoln has taken full responsibility for CFPL&#39s failings and I regret that some of our customers were disadvantaged.”

Which? principal researcher Teresa Fritz says: “We have always said that we want the FSA to carry out a complete review of all City Financial Partners&#39 files. This week&#39s announcement does not change that but it does make it even more crucial.”

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