Coutts under investigation regarding AIG products

Coutts, the high-class banking division of Royal Bank of Scotland, is under investigation by the FSA in relation to a specific AIG linked savings product which was sold to a number of the bank's customers. The product was marketed under the Alico brand name which has since been sold off to US insurer MetLife for just over $15 billion.

It is unclear exactly what went wrong with this particular savings bond although AIG was forced to suspend all withdrawals at the height of the financial difficulties experienced after the credit crunch. A number of high profile customers of the bank have stepped forward with claims that they lost millions of pounds because of the AIG-based investment which were allegedly sold as low risk and easy access savings bonds. However, Coutts has made clear that while the product was sold as low risk it was not sold as risk-free - as no investment ever is.

This FSA investigation into AIG related savings products is unlikely to be the last as the company is attracting the attention of regulators around the world. AIG itself was on the verge of collapse before the US authorities stepped in with a multibillion dollar taxpayer investment to save the company.