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.
Useful links:
How to
claim compensation for mis sold investments
Claims Financial
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