The Financial Conduct Authority (FCA) has formally requested Sheffield-based Abbey Lane Financial Associates Limited and Swansea-based Estate Capital Financial Management Limited to stop making “misleading” redress offers to ex-British Steel Pension Scheme (BSPS) members.
This comes after the UK regulator warned advice firms they should stop making unsolicited settlement offers to former members of the BSPS who are likely to be part of the redress scheme it has set up.
Now, the FCA has issued first supervisory notices to the two firms after Abbey Lane “made offers of £100 to 82% of its clients who were BSPS members and Estate Capital made offers of £300 to 83% of its former BSPS members”, it said.
It added: “We are concerned that these offers are significantly misaligned with the average calculated redress of £45,000 ($54,437, €51,108) for former BSPS members who received unsuitable pension transfer advice.
“The firms will be required to apply the redress scheme to consumers who have accepted these offers in the same way they must for consumers who have not accepted offers. This means that they should receive the appropriate amount of redress. We will not tolerate this behaviour and we will take further firm action to put a stop to this sharp practice as needed.”
The FCA has laid out a number of requirements to the two advice firms, such as:
- The firms must not, without the prior written consent of the FCA, make any further unsolicited settlement offers to consumers;
- They must withdraw all unsolicited settlement offers that have not been accepted and within three business days must notify all consumers who have not accepted unsolicited settlement offers sent to them that those offers have been withdrawn by sending the form of letter to those consumers;
- Where consumers have accepted unsolicited settlement offers, the firms must follow all the same processes set out in the redress scheme that they must for consumers who have not, prior to the effective date of the redress scheme, accepted any offer of redress in connection with BSPS pension transfers; and
- This includes following all requirements in relation to reporting to and notification to the FCA, observing all deadlines, sending all letters and conducting all communications required under the redress scheme, following all information gathering requirements, conducting case reviews using the process set out within the redress scheme, following all supervision and delegation requirements, complying with requests for information from the FCA and follow all record-keeping requirements.
The advice firms have the right to refer the matter the Upper Tribunal.
Several weeks ago, the FCA said it was aware of 15 companies, some part of the British Steel Action Group, that “may be engaging” with ex-BSPS members.
The action group is made up of pension advice firms involved in the British Steel saga, and it recently launched a legal challenge against the FCA over the set-up of the British Steel redress scheme.