The Financial Conduct Authority (FCA) has formally required two firms to stop making unsolicited settlement offers to former members of the British Steel Pension Scheme (BSPS), after previously warning firms to withdraw any existing settlement offers.
The FCA recently confirmed that it was looking into reports of firms making unsolicited offers to former BSPS members amid concerns they could be a “deliberate attempt” to exclude former members from participating in the FCA's redress scheme.
In light of these “serious concerns”, the FCA also warned firms that they should withdraw any existing settlement offers currently pending any consumer agreement, treat any pending settlement offers as withdrawn, and cease making any further offers to former BSPS members who have not made complaints.
However, it has since formally required two firms Abbey Lane Financial Associates Limited and Estate Capital Financial Management Limited, to stop making these offers.
According to the FCA, 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.
The FCA raised concerns that these offers are “significantly misaligned” with the average calculated redress of £45,000 for former BSPS members who received unsuitable pension transfer advice.
The FCA stated: “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 is also currently facing a legal challenge over the redress scheme, although it said that it is “confident” that its decision to set up the redress scheme and will “vigorously” defend it, branding the legal challenge as an “attempt to delay the payment of redress”.
This article first appeared on our sister title, Pensions Age.
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