21st April 2011
Today (21 April), the Financial Services Compensation Scheme (FSCS) and Norwich and Peterborough Building Society (N&P) have finalised an agreement confirming that the FSCS will receive approximately £28m. This amount is for compensation the FSCS has already paid to N&P Keydata customers.
This arrangement will facilitate certain ex gratia payments to be made directly to those customers of N&P who invested in Keydata life settlement products. This arrangement is part of N&P’s agreement voluntarily to make ex gratia payments available to all customers who purchased these Keydata products through the firm. N&P will calculate the payments in line with the general approach of the Financial Ombudsman Service in determining Keydata complaints, but the £100,000 cap will not apply.
Following this calculation, customers who have already been compensated by the FSCS and assigned all their rights to the FSCS will receive an ex gratia payment from N&P. Together, the payment from the FSCS and the ex gratia payment from N&P will total the amount N&P customers would otherwise have been eligible to apply for from N&P. Customers who have not been compensated by the FSCS will be invited by N&P to apply for an ex gratia payment. N&P will contact its customers shortly with more information.
The FSCS’s Chief Executive, Mark Neale, says: “This is a positive development for both consumers and our levy payers. It is likely that N&P customers will receive a higher amount overall than they would otherwise have received from the FSCS. At the same time, our levy payers will benefit as a consequence of this significant recovery.
“We pursue recoveries against third parties whenever it is reasonably possible and cost effective for us to do so. We intend to pursue further recoveries in respect of our compensation costs in relation to Keydata in the future.”