Norwich & Peterborough Building Society is to receive 250 compensation claims by lawyers acting for investors whose savings were placed in Keydata products on the group’s advice.
Law firm Regulatory Legal says it will also this evening send documents to the FSA alleging that N&P recommended Keydata products to inappropriate clients. The documents will also claim that most of the clients had all of their savings placed in Keydata products but N&P should have diversified their portfolios between different providers.
The clients being represented had their savings passed by Keydata – which collapsed in 2009 – to a Luxembourg-based traded life settlements group called Lifemark, which is under provisional administration.
The investor claims come after N&P has separately been ordered to pay £28,000 compensation to an elderly couple under a provisional ruling by the Financial Ombudsman Service over its Keydata advice, which the building society is appealing.
The Regulatory Legal documents, based on interviews with the savers, claim that of 207 investors 180 invested all of their available funds into Keydata products on N&P advice.
The documents claim that 74 per cent of the savers wanted to invest for growth, but the Lifemark bonds were income products.
They claim 94 per cent of the investors have said the liquidity risks associated with traded life policies were not explained to them by N&P, and 98 per cent claim N&P did not explain the importance of diversification of their portfolios.
Regulatory Legal partner Gareth Fatchett says: “The facts speak for themselves. You cannot over-expose people to such an extent because, very simply, it is bad advice.”
The Financial Services Compensation Scheme is set to rule before the end of September on whether it will compensate investors for any losses from Lifemark.