The Financial Conduct Authority (FCA) has acted against a third firm, which it says avoided its liabilities under the British Steel Pension Scheme (BSPS) redress scheme.
The regulator said that David Stock & Co made unsolicited offers of £50 ($62, €58) to nearly half (48%) of its clients who had been BSPS members and had not yet made a complaint.
The FCA said it was concerned that the unsolicited settlement offers were not calculated in line with its guidance and that they represented “a deliberate attempt” to exclude former BSPS members from the redress scheme.
As a result, the watchdog has imposed requirements on David Stock & Co that consumers who accepted the offers must be treated in the same way as those who did not. The watchdog said that this would ensure all eligible David Stock & Co customers would receive the redress they are entitled to.
Under the scheme, firms must review the advice they gave and pay redress to those who lost money because the advice was unsuitable. The aim of the redress is to put people back in the financial position they would have been in at retirement if they had stayed in the BSPS.
David Stock & Co is the third advice firm the FCA has told to stop this practice after its previous warning to firms. Previously, the FCA 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-BSPS members.
‘Dear CEO letter’
At the end of last week, the regulator published a ‘Dear CEO’ letter to raise its concerns to firms that have calculated redress using third-party actuarial providers’ online portals, without any actuarial oversight, prior to the start of the redress scheme.
It said this appeared to have been a contributing factor to the misleading redress offers.
The FCA also said that where firms have calculated redress for former BSPS members using third-party services, they should review those offers, even where they have been accepted on a full and final basis, and that they should notify the regulator.
The regulator added: “We will not tolerate any attempt from firms to exclude former BSPS members from the redress scheme and we will take further action to put a stop to it as needed.”
