Sesame fined £330,000 over precipice bond failings

Sesame has been fined £330,000 by the Financial Services Authority (FSA) for incorrectly rejecting hundreds of complaints about precipice bonds it sold.

The FSA said that the Misys-owned (MSY) network had Sesame had incorrectly rejected complaints from 350 customers between March 2003 and October 2004 over the ways in which they were sold structured capital at risk products (Scarps).

In all, the customers involved lost almost £5.9 million on sales made by Sesame’s legacy networks. The company was formed by the merger of Kestrel Financial Management, Financial Options, IFA Network, Countrywide Independent Advisers and DBS Financial Management.

The FSA uncovered the failures during its Scarps review in 2004.

‘The failings we found highlight the need for firms to implement and maintain robust complaints handling procedures and to train staff adequately,’ said FSA head of retail enforcement William Amos.

‘Sesame has no excuse for complaints handling failures of this kind, not least because the FSA had already issued a number of publications concerning both Scarps and complaints handling.’

The FSA added that the fine would have been substantially higher had Sesame not fully cooperated with it over mitigation and remedial action.

Sesame chief executive Patrick Gale said: 'We have co-operated fully with the FSA and conducted a prompt review of all Scarps complaints, which has led to all affected customers being compensated.'