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Skandia to pay clients after error

Skandia is working with the FSA to credit 10,000 policyholders who have been overcharged because of a system error.

The overcharging mainly effected personal pension plans between 1991 and 2001. Incorrect deductions were made to certain policies where holders had reduced their original premium commitment.

The error was identified by the firm last March when systems were checked after a customer complaint.

Skandia says it aims to repay all policyholders by the end of the first quarter of 2005.

The firm believes the error has affected around 10,000 plans. Although it cannot confirm the extent of individual losses, a sample of 10 per cent of errors showed that no policies were overcharged more than 70.

Skandia says it will not have to pay back more than 100,000.

The FSA is not talking about a financial penalty at this stage.

Skandia press officer Jo Gilbey says: “There was a system error which we found ourselves. We owned up to it and informed the regulator in March.”

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