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Standard Life savers queue up for mis-sold investment compensation
By Elliot Wright, 27th January 2010
Savings giant Standard Life is paying out refunds to investors who lost money in a recent 'cash' fund scandal.
The firm's Pension Sterling fund was mis-sold to thousands of customers as a cash haven for those who did not want to risk their retirement savings.
But Standard Life failed to describe the fund properly in its marketing materials and investors were unaware that their money was being put into risky financial instruments such as toxic mortgages issued by Northern Rock.
Investors lost out as a result and the company was slapped with a £2.45m fine by the Financial Services Authority and forced to return £100m to customers.
1,500 complaints have been lodged with Standard Life so far by canny savers looking to be awarded compensation.
In many cases, the compensation is based on what the saver would have received had they invested into the Standard Life Cash fund rather than the dodgy Pension Sterling fund.
The company could end up paying millions of pounds in compensation. Even though the base rate has been at 0.5% since last March, it was at 5.5% when the fund ran into problems in late 2008 to early 2009.
A Standard Life spokesman said: "We have been handling these complaints on an individual basis to reflect investors' different expectations."
Savers affected by the scandal can apply for compensation by complaining either directly to Standard Life or to the Financial Ombudsman Service.
How to claim compensation for mis sold investments