The Prudential Assurance Company has been fined £23.87m for failing to tell customers about their pension savings options.
The Financial Conduct Authority (FCA) has slammed the company with the penalty after finding some “very serious breaches” relating to how Prudential talked to customers over the phone about annuities sales.
The documentation the company salespeople used allegedly created a significant risk of them neglecting to tell customers that they could benefit from looking around to find better options. Anyone selling annuities must tell customers about the options they have.
Moreover, the FCA also found that salespeople could earn a considerable commission on-top of their salary if they made the sale before 2013. This exacerbated the risk of them acting in their own self-interest and not in that of their customers, according to the FCA.
“Prudential failed to treat some of its customers, who could have secured a better deal on the open market, fairly,” said Mark Steward, executive director of enforcement and market oversight at the FCA. “These are very serious breaches that caused harm to those customers. Prudential is now rightly focussed on redress and today’s financial penalty reinforces the cardinal obligation of fairness that firms owe to customers.”
Prudential did not dispute the FCA’s findings, which made the firm qualify for a 30% discount, reducing the fine from £34,10m to £23.87.
Moreover, Prudential is reviewing non-advised annuity sales in order to identify any customers who may be entitled to redress as a result of the firm’s failures. As of 19 September 2019, Prudential has offered approximately £110m in redress to 17,240 customers.
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