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N&P feels fury of Keydata investors at AGM

Angry Keydata investors descended on Peterborough last night to vent their frustration at Norwich & Peterborough Building Society’s board over the way it handled the Keydata crisis.

N&P held its annual general meeting last night in the wake of being fined £1.4m by the FSA and announcing £51m in compensation for customers who were mis-sold Keydata products.

Around 100 members of the society attended the AGM, and 240 people attended in total.

Many of the members were angry at the length of time the Keydata issue was taking to resolve.

Letters are currently being sent to customers detailing the calculations on which their compensation will be based.

Customers who have already received a payment from the Financial Services Compensation Scheme will receive a cheque with their letter, relating to any interest payable and any further monies owed.

Reading a prepared statement, N&P member Tony Hunt said: “I am speaking for people who could not make it here today – people who are aged, infirm, sick, and well into their seventies and eighties.

“The FSA said that N&P failed in its duty to provide suitable advice. Driven by commission you advised people to withdraw from safe accounts into what became known as death bonds. It was totally immoral.”

Another member, Derek Wright, said: “Can I appeal to the board to keep us onside and make us an offer that is both fair and generous, rather than leave us with these hateful feelings towards N&P?”

N&P finance and risk director Jeff Pritchard said: “I would like to offer an apology to all the members of the society, and those who invested in Keydata. It is a genuine apology not just from me, but from the board, and everyone who works for the society.

“Keydata was a significant event, and the FSA’s reaction and fine was a significant event. The board of N&P recognises the importance of that action and we have worked alongside the FSA throughout their investigation to resolve this issue.”

Members are due to vote in August about a proposed merger of N&P with Yorkshire Building Society.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Perhaps it is time to reassess the whole concept of having investment “advisers” waiting to pounce on unsuspecting cash depositers linked to moneylenders…

  2. This recent problem highlights the problem of organisations eg banks , building societies , insurance companies etc being regulated to carry out investements for customers .

    If the FSA through the Treasury were to carry out a complete overhaul of the system and that this form of investment work had to be carried out by Independent Financial Advisors who had no connection whatsoever with the deposit holders and that all advice had to be of a Whole of Market basis it would stop this potentially dangerous practice. The N&P/ Keydata saga is no doubt just the tip of an iceberg and that similar poor advice ( sales ) are taking place as I type this

  3. Graham Pattinson 28th April 2011 at 1:38 pm

    The problem here is that N & P is a Mutual and owned by its members. The compensation figure of around £50 million will be picked up by either TP insurers or members so there will be a cost to members who did not invest in Keydata! I think that the FSA have a cheek to fine N & P. Let’s face it, had Keydata not been authorised and regulated by the FSA in the first place then no business would have been placed with Keydata at all. Perhaps the FSA should be fined for not spotting the problems when they went for authorisation. I guess it is much easier issuing a fine after the event than preventing the event happening in the first place!

  4. @Graham – That was a point which has previously been made about the FSA fining mutuals in the past (including Nationwide for a stolen laptop which held data). Fines like these are a double whammy for the persons sinned against.
    It particularly applies with Mutuals, but it does have some relevance with companies too in that although it is the shareholders who are hit, it is actually errors by the executive. It should be the executive who experiences pain for their errors, proportionate to their errors and ability to pay, with the shareholders and mutual members paying the difference.
    The problem is that just as the executives at mutuals and companies walk away scot free, this principle also happens to the FSA executives themselves (as Hector Sants admitted in front of the TSC just over 2 months ago, they have NO personal liability and even if teh FSAitself was held liable, it would not be the executives who made the error who’d pay it would be the adviseory firms who pay the FSA fees would pay the FSA and the consumer who pays the advisers in order to pass it on to the FSA!). The FSA executives are paid a premium market rate for a job and yet have no personal liability. Even if they claim to earn below market rates, they use working at teh FSA as a spring board in to highly paid executive jobs at the big players. Look where John Tiner and Clive Briault went. They both left scot free leaving Hector Sants to face the music and tidy up the mess they’d presided over. A bit like Golden Brun, but at least he moved from Chancellor to PM so late that he still got caught by his won sh**. Hopefully for him it will stop him getting anywhere near the top job at the IMF.
    Unlike shareholding directors, all these politican and quango crats don’t even risk their own share holdings/options in their employer!
    It is for this reason that the FSAs failure to supervise Keydata & N&P properly and ensure that the FSAs own reports were brought to the attentio of interested parties (including IFAs) means that the FSA itself were massively culpable in the detriment to consumer and adviser alike.

    Will the SFO truly investigate or will it be brushed

  5. IFA Defence Union 28th April 2011 at 7:41 pm

    What happens when the first life office falls of its perch?

  6. Ms B Collinson 1st May 2011 at 8:13 pm

    Whatever the rights or wrongs of this saga, at the end of the day it is the INVESTORS of the N & P who will pay for it, like they always do.

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