The problem of pension transfer advice has caused headaches for victims of mis-selling and the various regulatory bodies established to protect individuals from scams for decades. This issue has been more prevalent than ever since the pensions freedom act came in to play in 2015, making it possible for retail customers to seize control of their funds with no lower threshold. Unfortunately, this also opened new avenues for financial scamming with more complex bureaucratic processes for determining liability in cases were individuals received unsuitable pension transfer advice.
Pension Transfer Advice: Who’s to Blame?
This complicated financial landscape can be difficult to navigate, but in cases of financial negligence regarding regulated financial activities, retail customers can typically rely on support from the Financial Ombudsman Service (FOS). The Ombudsman is called in to mediate disputes between claimants and pension providers or independent financial advisors (IFAs) where there is a fundamental disagreement about the suitability of a product or pension transfer advice.
Yet the involvement of the FOS is not necessarily an indicator of success, and thousands of individuals who were victims of pension scamming have had their claims rejected by the FOS on numerous grounds. Typically, the onus for not seeking pension transfer advice falls upon the individual as opposed to a scheme provider. However, recent developments have presented a second chance for scam victims to seek redress.
In what has been described as a landmark ruling for the pension transfer advice sector, the FOS has ruled against the Northumbria Police Authority for not conducting adequate checks before transferring a member out of the Police Pension Scheme. This includes failing to provide the claimant with The Pensions Regulator’s mandatory transfer fraud warning and not thoroughly engage him with concerns regarding the transfer request.
The director of policy for Royal London emphasised the importance of the FOS’s ruling in the grander scheme, suggesting:
“This is a very important ruling. While individuals obviously have a responsibility to take good care of their pensions and to take proper advice, this ruling shows that pension schemes also have important duties to protect members.
“Not only should they flag the risk of scams, but they should also be undertaking thorough checks about where the money is going to be transferred to. It might be the case that some past victims of scams who have complained to a pension scheme and been turned away could still get redress if the Ombudsman thinks that their scheme trustees did not do a proper job in protecting them.”
While this case may be considered an isolated incident, it highlights the role of scheme providers in the provision of adequate pension transfer advice and could offer a lifeline to claimants that were rejected by the FOS. In cases where existing scheme providers did not carry out adequate checks or communicate concerns regarding pension transfers, they may be liable for compensation.
Pension Transfer Claims with Money and Me Claims
At Money and Me Claims, we provide expertise and understanding to support your financial compensation claims. Our uphold rates with FOS pension compensation claims are outstanding, and we have an exceptional track record of helping clients win compensation for claims relating to pension mis-selling.