Norwich & Peterborough Building Society apparently systematically mis-sold investments to hundreds, possibly thousands, of its customers, according to damning evidence that emerged this weekend.
The society will tomorrow receive letters from solicitors acting on behalf of 250 customers, demanding compensation for investment advice they received in N&P branches.
At the same time, a dossier containing evidence of what appears to be N&P’s repeated mis-selling of investments between 2006 and 2009 will go to the Financial Services Authority.
Victim: Retired Carol Scholes, 56, relied on Keydata for 90 per cent of her income. Her N&P branch in Wisbech advised her to put the sale proceeds of her business into a single bond
It is the biggest misselling scandal to engulf a mutual in decades, and with compensation likely to run into tens of millions of pounds poses a threat to N&P’s future.
The debacle has already led to calls from some of the 431,000 members for chief executive Matthew Bullock to be sacked and for a statement from chairman Gordon Horsfield.
The scandal is linked to last year’s collapse of Keydata, an investment company whose sophisticated bonds were sold by N&P.
Advisers at N&P sold 3,100 bonds to mainly older, risk-averse savers,collecting £3 million in commission.
But in a high proportion of cases, the advisers told customers to put most or all of their money into the bonds. The advisers also failed to spell out risks or disclose the commissions.
A complex sequence of events after Keydata’s collapse has left bondholders waiting to learn whether their holdings are worthless and whether the Financial Services