BARCLAYS has been fined £7.7m for mis-selling two Aviva funds after one in seven of the investors complained to the City regulator.
The Financial Services Authority (FSA) yesterday imposed its largest-ever fine for retail sales breaches after identifying “serious failings” in Barclays’ sales practices for two Aviva income funds.
The bank raised £692m from 12,331 individuals, most either retired or approaching retirement, between July 2006 and November 2008.
More than 1,730 people complained to the FSA, prompting it to investigate the bank. An internal investigation by Barclays has since found more than half of sales of each fund to be questionable.
Staff were found to have failed to check the funds were suitable for customers’ needs, failed to explain the risks involved, and of issuing brochures and documents that did not explain the risks clearly. Barclays was also found to have responded slowly when problems came to light.
“We view these breaches as particularly serious and fully deserving of what is a very substantial fine,” said Margaret Cole, an FSA managing director.
Barclays must also pay £60m in compensation to customers. It has already paid out £17m.