The Financial Conduct Authority (FCA) has urged advice firms to cease contacting former British Steel Pension Scheme (BSPS) members with unsolicited settlement offers after some companies offered them settlements as little as £100, much less than the £45,000 average.
The FCA recently requested that Estate Capital Financial Management Ltd and Abbey Lane Financial Associates Limited cease making these proposals. 82 per cent of Abbey Lane’s clients who were BSPS members received offers of £100, and 83 per cent of Estate Capital’s former BSPS members received offers of £300.
According to the FCA, these proposals are significantly out of line with the projected average settlement of £45K for former BSPS members who received inappropriate pension transfer advice.
Firms will be required to assess the advice they provided as part of the redress process and compensate customers who lost money as a result of unsuitable advice.
The FCA are worried that these unauthorised settlement offers, which are probably for less money than they are entitled to under the redress plan, are an intentional effort to keep former BSPS members out of the redress programme.
The FCA has urged firms to withdraw any existing settlement offers currently pending any consumer agreement, treat any pending settlement offers as withdrawn and to cease making any further offers to former BSPS members who have not made complaints.
Consumers who have accepted these offers will be subject to the same requirements for the redress scheme that apply to those who have not. This suggests that they ought to get the correct amount of compensation.
The FCA says: “We will not tolerate this behaviour and we will take further firm action to put a stop to this sharp practice as needed.”
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