Standard Life Assurance fined £30m for phone sales failings
Standard Life Assurance Limited has been fined £30million for failing to give its customers all the required information when selling annuities.
An annuity is a type of retirement income product that can be purchased with some or all of an individual’s pension pot. It is a complex financial product, and the law states that companies must give customers accurate and adequate information when selling to them, particularly if the customer is ‘non-advised’, meaning they have not received professional financial advice.
The Financial Conduct Authority conducted a review on Standard Life.
It found it was using telesales agents to sell its annuities but did not have adequate controls to monitor the quality of the calls between its call handlers and non-advised customers.
The company had offered their sales staff large incentives to sell annuities, with the opportunity to double their basic salary. This created the risk that the sales agents would place their own financial interests ahead of fair customer outcomes.
One of the requirements when selling to non-advised customers is that firms must inform them that they could get a better deal elsewhere if they were to shop around.
However, the review found that Standard Life had failed to adequately monitor calls between call handlers and customers.
Standard Life did not dispute the FCA’s findings. Its agreement to accept them meant it qualified for a 30% discount. Otherwise, the FCA would have imposed a financial penalty of £43,989,300.
Please contact Jon Alvarez if you would like more information about the issues raised in this article, or any aspect of company and consumer law.