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.
'Failure to pay attention can result in enforcement'
200,000 LISAs opened so far
From June 2019
11 years since launch of three Chartered titles
Hired 200 extra operational staff