The Ancient Order of Foresters Friendly Society Limited

FCA action

fine

1

in fines

£55.0k

most recent

August 2006

• Fined £55,000 on 23 August 2006

  The FSA imposed a penalty of £55,000 on The Ancient Order of Foresters Friendly Society Limited (Foresters) on 23 August 2006. The penalty was levied for breaching: (a) Principle 3 of the FSA's Principles for Businesses and Senior Management Arrangements, Systems and Controls (SYSC) Rules: by failing to take reasonable care to organise and control its financial promotions compliance function responsibly and effectively resulting in inadequate risk management systems in relation to financial promotions compliance; and (b) Principle 7 of the FSA's Principles for Businesses and Conduct of Business (COB) Rules: by failing to pay due regard to the information needs of its customers and potential customers, and communicate information to them in a way which is clear, fair and not misleading. A summary of the decision is set out below. Full details of the decision can be found in the Final Notice on the FSA's website. These breaches arose from Foresters' failure to: (a) ensure that all financial promotions issued by it were confirmed as compliant with the FSA's Rules in Chapter 3 of COB (COB 3) before they were communicated; (b) make and retain, either at all or for the requisite three or six years, records of each non-real time financial promotion which it had confirmed as complying with the COB 3 Rules; (c) ensure that appropriate risk warnings were included in: (i) the Autumn Gold television advertisement featuring Stephanie Cole (the Stephanie Cole Autumn Gold television advertisement); (ii) the Autumn Gold television advertisement featuring Tommy Walsh (the Tommy Walsh Autumn Gold television advertisement); and (iii) the TeddyTrust Child Trust Fund (CTF) television advertisement. (d) ensure that the Stephanie Cole and Tommy Walsh Autumn Gold direct offer packs were clear, fair and not misleading, appropriately balanced and in particular stated prominently that a customer should contact an appropriate adviser if they had any doubts about the policy's suitability; and (e) adequately resource, train, and monitor the operation of, its compliance function. This case was settled under the Executive Settlement procedures introduced following the Enforcement Process Review. In reaching its decision, the FSA has taken into account Foresters' conduct in relation to this matter which included: (a) the steps Foresters has taken which were aimed at making it substantially compliant with the FSA's Rules; (b) the further steps Foresters is continuing to take in order to promote its compliance in the future including an independent review of its financial promotion systems and controls; (c) the fact that Foresters' conduct was not deliberate or reckless; and (d) Foresters' cooperation with the FSA and the action it has taken to remedy some of its financial promotions breaches.