STEP

Title Research

Elderly clients to get compensation for bank's mis-selling

20 January 2011

Barclays Bank may have to pay out more than GBP60 million in fines and compensation for selling unsuitable investment products to elderly clients.

According to a Financial Services Authority announcement this week, the bank sold two Aviva investment fund products to over 12,000 people between July 2006 and November 2008. Clients' total investments in the two funds came to GBP692 million.

However, most of the sales appear to have been made to clients at or nearing retirement, for whom the products were inappropriate in terms of risks and expected timescales for returns. Nearly two thousand of these victims complained to the FSA.

The authority imposed a GBP7 million fine on Barclays - the highest ever imposed for retail investment failings. The bank has already paid out GBP17 million in compensation to clients, and the FSA estimates it may have to pay a further GBP42 million.

 

Sources

 

Financial Services Authority

Barclays

Daily Telegraph

Bloomberg

 

 


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