Aviva to pay £2m compensation over misleading marketing

According to an article on FTAdviser, Aviva said they had identified the issue in the course of ‘normal business reviews’, finding that the literature implied customers’ capital investments were secure and would not go below the original level invested.

40,000 investors are to receive on average around £55, and are being informed that their investments are subject to fluctuation going forwards. Consequently, Aviva have warned that this compensation is a one-off and that no further payments would be made in future if the fund’s value fell again.

In the letters sent out to investors, Aviva’s chief operating officer Kevin Moss apologises to investors, stating that "it was incorrect to imply that the Aviva Deposit fund would provide protection of capital."

Aviva blamed the fund’s poor performance on record low interest rates, while experts have pointed to the fund’s 1pc annual charge.

A spokesperson for Aviva said:

“As part of our continual review of our products we are currently mailing our Aviva Deposit Fund customers to emphasise that their investments can fluctuate according to market conditions, and that these type of funds are intended as a shorter-term investment. This is really important given the current market conditions and low interest rates.

“As part of our review we also identified that although our terms and conditions were correct, that we had implied in some of our older marketing literature that customers’ funds would not fall below the amount they had invested. This was not correct and we apologise for any misunderstanding. Our focus is always to correct any error we have made with a fair resolution for our customers.”