Want to buy breakfast with gold? Millions face British Gas price hike: Energy bills for invest in hard money loans fuel customers will increase by an average of 5. 25 million to elderly homeowners in discredited investment schemes sold between 2003 and 2008, Financial Mail has discovered.
Now the society faces pressure to pay compensation. The Integrity Maximiser plan, operated by a company that folded in 2009, was sold by financial advisers to 660 cautious and elderly investors. The complicated deal involved homeowners borrowing large sums. The money was used to buy second-hand or ‘traded’ endowment policies, which were supposed to mature and generate sufficient returns to cover the cost of the loan and generate a profit. But the investments underperformed, resulting in some people losing their properties or being saddled with huge debts, or both.
The Financial Services Authority last year condemned the plans, saying they were ‘high risk’ because they ‘used the strategy of borrowing to invest’. The FSA has fined four firms over the schemes. Bank of Scotland was the other. A number of Integrity Maximiser cases are with the Financial Ombudsman Service and several investors have also launched legal actions. In most cases, financial advisers are being chased for redress, but Financial Mail understands that BoS has been approached by some borrowers and has offered to settle, opening the way for complaints against Newcastle.
The society said: ‘Newcastle Building Society provided a loan facility where the security for the advance was based on the surrender value of the traded endowment policy. The society was not responsible for, and did not provide, advice on the sale of these policies. Advice was provided, and needs assessed, by the borrowers’ independent financial advisers, who would have been regulated at the time. Loss-making Newcastle is among the weaker building societies. 43 million investment in failed Icelandic banks led to a loss in 2008 and the society barely clawed its way back to profit in 2009. Asked if it was happy to be associated with the Integrity Maximiser investment scheme, the society declined to answer. Could these LED lights on crossings save lives on the road?
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