Lincoln Assurance has been hit with a £485,000 fine for mis-selling 10-year endowment savings plans ...
Lincoln Assurance has been hit with a £485,000 fine for mis-selling 10-year endowment savings plans through its appointed reps firm City Financial Partners.
The life office has been spared a larger blow, however, because it acted at the first sign of a problem and without prompting, says the FSA.
Known at the time as Lincoln Financial, mis-selling occurred at the US-owned life office between 1 September 1998 and 31 August 2000 but action was taken immediately by the firm after Which? Magazine published an article criticizing the firm and the PIA paid a visit.
After conducting an initial sample of 5,000 cases, Lincoln eventually invited all 28,000 clients under the age of 35 who bought 10-year savings endowment policies between November 1993 and October 2000 were offered a review of their policy and 45% of those have so far responded.
Of those who did respond, 59.2% declined a review while the average redress paid is said to be £1,809 per customer.
Lincoln's failing, says the FSA, was its compliance oversight of CFPL to ensure products were only sold to customers it suited their needs - and not the young single customers they were sold to - so £8.8m has been set aside in compensation for the 5,000 customers who have requested a review or are due redress.
Appointed Representatives' City Financial Partners were sold in October 2000, but only a handful of those advisers eventually ended up at Inter-Alliance when the national IFA bought Lincoln's sales force.
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