24th February 2010
A financial firm has been ordered to compensate customers a
record amount after it mis-sold thousands of products.
Park Row, an independent financial advice business based in
Leeds, has been told by the Financial Services Authority (FSA) to
repay up to an estimated £7.8m to nearly 24,000 customers.
The firm was found to have recklessly failed to ensure that
proper advice was given on pensions, mortgages, investments, bonds
structured products and annuities - and thus exposing customers to
unnecessary risk.
The FSA discovered a catalogue of errors between January 2007
and January 2009, including advisers giving advice based on the
commission they would receive rather than whether this was suited
to the customers' needs.
Despite being made aware of concerns on several occasions, the
firm consistently failed to act and rectify the problems.
Consequently, compensation will now be offered to 24,000
customers, who will be contacted by an external examiner with
further information.
The FSA estimates the payments to those affected could total
between £5m and £7.8m. This is potentially higher than the previous
record of £7.7m that mortgage lender GMAC-RFC was forced to pay
46,000 of its borrowers after it was found it had treated those in
arrears unfairly.
Margaret Cole, head of enforcement at the FSA said: "Park Row
failed to take adequate action to address failings in systems and
controls to ensure its advisers were giving customers suitable
advice, despite the real risk of customer harm.
"The FSA has secured funding estimated at between £5m and £7.8m
to ensure that where customers were not given suitable advice, or
where Park Row cannot demonstrate suitable advice, they will
receive redress."
The firm is now being wound down, with no new business taken on
since November. However, the FSA said the repayments will be
supported by Park Row's parent company, Royal Liver Assurance
Limited.
A spokeswoman for Royal Liver confirmed that Park Row was
determining how many incidents need to be addressed.
"[It] is committed to contacting customers who may have been
affected and taking remedial actions where appropriate," she
said.
Useful links:
Mis-sold investments and bonds
Mis-sold
mortgages
Mis-sold
pensions
Claims Financial
Testimonial
"I just had to put pen to paper and write to say I'm more than delighted with my settlement that you won me back from my PPI I had with Lloyds TSB. The Claim Forms were simple to fill in. It was a breeze"
Mr R Evans 11 Nov 2010