A new legal twist in long-running battle about investment mis-selling has brought compensation a little nearer for thousands of people who claim they were misinformed about the costs.
Appeal court judges have now said that a large part of the costs paid by NN Group clients were unjustified and has described information provided by Nationale Nederland as “unfair”.
The so-called ‘woekerpolis’ affair was brought to light in 2006 by TV consumer show Radar, following an investigation by the Dutch financial markets regulator AFM. The AFM said hidden costs meant many customers paid more to cover their investments than they earned from them.
Altogether around half a million people took out similar products from various insurers between 1990 and 2008.
Clients paid a monthly fee, expecting a large payout at the end of the period – usually 20 or 30 years – but then discovered much of their investment had gone on costs, including fees to selling agents.
In one case cited by the court, almost half the €8,500 annual investment by one client went on life insurance. This should have been made far more explicit in the documentation, the court said.
NN, which will appeal against Tuesday’s ruling, says it has always been transparent about the costs and met the regulations in place at the time.
Ab Flipse from the Woekerpolis.nl association which brought the case, told the Financieele Dagblad it is clear from the ruling that Nationale Nederlanden, as it was then, should have better informed clients about the risks.
“Victims finally can look toward the compensation which is owned to them,” he told the paper.
Various settlements totalling some €3 billion have already been reached between clients and insurance companies over the past few years. But some clients are not satisfied with the deals that have been made and are pressing ahead with their claim for more compensation
Cases are also under way against Reaal, which is also now part of NN, ASR, Aegon Nederland and Achmea.