Is this the last of the Lincoln scandals?

A £485,000 fine may not be the end of a mis-selling saga, says Paul Gosling

Lincoln Assurance was fined a hefty £485,000 this week by the Financial Services Authority (FSA) for the mis-selling of savings plans by its former tied agent, City Financial Partners Ltd (CFPL). But the decision leaves unresolved concerns over the sale of other products to thousands of Lincoln clients.

The FSA found that staff of CFPL sold savings plans to people for whom the products were patently unsuited, such as young single people who would have been better off in flexible accounts such as Isas. As well as paying the fine, Lincoln has set aside £8.8m in compensation for the 5,000 customers who were wrongly sold the products. Over 28,000 people were sold the savings plans from 1993 until 2000, when the tied agency between CFP and Lincoln ended. Sales staff were transferred to Inter-Alliance and to Zurich.

Carol Sergeant, FSA managing director, said that financial services providers must sell products suitable for customers' individual needs. "The failings were particularly serious, but Lincoln has beenproactive in ensuring that customers are compensated where appropriate," she said. "Without this co-operation the fine would have been higher."

Michael Tallett-Williams, managing director of Lincoln Financial Group, said: "Lincoln has taken full responsibility for CFPL's failings. The FSA has noted that we voluntarily extended the review beyond the period in issue, an action we took in order to be fair to our customers. We have completed the review of all CFPL sales of these plans and offered redress to affected customers."

Lincoln added that the company's structure and culture have changed significantly since 2000, with different people, processes and procedures. However, Lincoln's inheritance appears serious. Many readers of The Independent have written complaining about Lincoln Assurance and the performance of some of its products. Most of these readers are unhappy about endowment policies designed to pay-off mortgages, typically likely to undershoot by half. The endowments were provided by Laurentian Life, Imperial Life of Canada, Citibank Life, Liberty Life and Cannon Assurance, all of which were subsequently taken over by Lincoln Financial Group.

Michelle Varian. of London, who complained in January alleging endowment mis-selling, says that she is awaiting a decision by Lincoln. Bob Scott of Leeds, West Yorkshire, who also complained to Lincoln in January, says that he has so far received only a letter of acknowledgement.

One Independent reader, Christina O'Donovan-Rossa, reported that she and her husband had also complained about the mis-selling by CFPL of free-standing additional voluntary contributions (FSAVCs) to pensions. Her husband has received compensation, while her case is still being investigated. Disturbingly, she added that a former salesman from CFPL has subsequently contacted her on behalf of his new employer, Inter-Alliance.

Charles Ansdell of Inter-Alliance agreed that one of his ex-CFPL salesmen had contacted a former CFPL client, but added that there was nothing wrong in having done so, provided there had been no mis-selling. Inter-Alliance still has over 50 sales staff previously employed by CFPL. "We have done everything possible to retrain them," said Mr Ansdell."

The Consumers' Association (CA), which initially drew attention to the problems with Lincoln in Which?, said that it had received complaints of mis-selling by CFPL of endowment mortgages and FSAVCs and would continue to press the FSA for a comprehensive review of CFPL.

The FSA can only disclose investigations with the approval of companies being investigated. Consequently the FSA has refused to disclose whether it is undertaking further investigations of Lincoln products. But a spokesman for Lincoln said that the FSA was definitely not investigating it regarding the allegations of mis-selling of other products, nor was Lincoln conducting any internal investigation into generic mis-selling by sales staff previously employed by Lincoln, CFPL, or any of the companies purchased by Lincoln.