Barclays has failed to pay out to a number of investors in Aviva’s Global Balanced Income and Cautious Income funds, over which it had agreed to provide up to £60 million in compensation, according to the Mail on Sunday.
The bank was fined £7.7 million by the Financial Services Authority (FSA) over mis-selling of the funds in 2011, with the regulator estimating at the time that the bank could pay up to £60 million in compensation to victims.
But according to Paul Cooper of Claims UK, who is co-ordinating claims among investors, a number of investors have been told they will receive no, or very little, compensation.
He told the Mail: ‘In more than 250 cases we’ve handled, many investors have received no compensation or very low offers along with statements to the effect the FSA has endorsed Barclays’ action. When we have pursued the complaint, the Ombudsman has inevitably required the bank to pay more.’
The paper cited the case of Margaret Shibon, a widow in her 80s who was told to invest £250,000 in mid-2007, and went on to lose £60,000. She received a letter from Barclays in May 2011 following a review of the advice she was provided. In it the bank admitted ‘you did not receive the most appropriate advice’, but said calculations ‘agreed with the FSA’ showed ‘you have not suffered a financial loss as a consequence of the advice. She later won £63,000 after taking the case to the Financial Ombudsman Service.
The FSA told the Mail: ‘When we require a firm to put a redress scheme in place, the intention is to restore the customer to the position they would have been in had they received suitable advice. Since the methodologies used are usually set out in letters to customers, there’s nothing confidential about them. It’s right people should be able to complain to the Ombudsman if they feel that the redress doesn’t reflect their losses.’