The five investment products at the centre of complaints

The Financial Services Authority (FSA) was particularly critical of the fact that many customers caught up in the complaints handling row were older and more vulnerable individuals.

Five products were indentifed as being at the centre of complaints made by customers. These were:

• The Collective Investment Plan: This used to be called a unit trust and its main purpose was to invest in a range of stock market funds of varying risk levels.

• The Personal Investment Plan: This was a life-assurance bond which also invests in a range of stock market funds

• The Guaranteed Growth Bond: This is a short-term life bond, lasting one or two years that pays a fixed growth rate. It acted like a deposit account, but with a fixed interest rate.

• ISA (Individual Savings Account) Investor: This is the ISA equivalent of the Collective Investment Plan above.

• Guaranteed Investment Plan: This is a life bond that invests in a mix of equities and gilts but has a guarantee of at least money back after five years.

Between 30 July 2007 and 31 October 2009, the Bank of Scotland received 2,592 advice related complaints about its sales of the investments, with 573,787 bought in this period.

The investments were recommended to customers by the banks' branch-based investment sales staff, but they were found to have made poor decisions in assessing the suitability of the investments for some customers who complained.

Complaint handlers did not properly assess whether many of the investments exposed customers to a level of risk which was more than they were willing to accept or able to take.

They did not uphold complaints from customers who were advised to invest too large a proportion of their total available funds into investment products.

The FSA also found that customers who were inexperienced in investments were not properly identified and complaint handlers did not take this into account properly when determining the suitability of the advice they were given.