The Financial Services and Markets Tribunal has upheld the FSA's judgment in its case against Legal & General (L&G).

But the Tribunal said the mis-selling of L&G's flexible mortgage plans was not as widespread as the FSA had originally speculated.

The FSA argued that L&G's procedures for the sale of its flexible mortgage plans to 41,000 "low risk" customers between 1997 and 1999 were defective, that these defects led to actual mis-selling and that the level of this mis-selling was significant.

L&G denied these allegations and referred the case to the Tribunal.

The Tribunal found in favour of the FSA and said that "these procedural defects will have caused or contributed to mis-sales".

It has also heard evidence from 13 L&G customers and concluded that, in these specific cases, eight had been mis-sold. The Tribunal noted that: "This represented potential mis-sales of 62% in this group of customers".

The Tribunal said the FSA was wrong to say that mis0selling products was widespread practice at L&G.

But, it said, "common sense indicates that there will have been a fair number of mis-sales beyond the eight that have been established".


How L&G will be penalised has not yet been decided.

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