The Financial Conduct Authority (FCA) has warned former members of the British Steel Pension Scheme (BSPS) that it has received reports of certain firms making unsolicited redress offers to steelworkers who have not made complaints.
The regulator is, so far, aware of four companies that are part of the British Steel Action Group that “may be” engaging with ex-BSPS members.
Under the scheme, firms will have to review the advice they gave and pay redress to those who lost money because of unsuitable advice. The FCA said the scheme is for members who have not made a complaint.
The watchdog said: “We believe the actions by firms may be a deliberate attempt to exclude former members from participating in the scheme, binding them to receiving less money than they might be entitled to under the scheme. If substantiated, this is wholly unacceptable and constitutes serious malpractice.
“Some firms have told consumers that their redress would amount to zero if it is calculated in accordance with our guidance. Preliminary evidence suggests that they are not following the guidance we expect them to follow when calculating redress.
“We are urgently looking into these cases and will consider taking action against any firm we find to be misleading consumers or making offers not calculated in line with our guidance.
“Accepting an offer now might mean former members are not included in the scheme and might mean they do not receive the right amount of redress. If former members do not take any action and do not reply to the offer from the firm, they will be included in the redress scheme we have established, provided they are eligible. Firms will then be required to use our calculator when calculating redress if the advice was unsuitable.
“Former members who receive offers before the scheme starts and are unsure about their options can contact the Financial Ombudsman Service (FOS) free of charge. Former members who intend to accept offers before the scheme starts may wish to consider obtaining independent legal or financial advice before doing so.”
International Adviser contacted FS Legal Solicitors, who represent the action group, for comment but the law firm did not reply in time for publication.