FSA reveals 250 Arch Cru complaints received by Fos
More on UK Regulation
- Crippling fees of ‘unaccountable’ FCA
- Stamp duty shock to tighten buy-to-let criteria
- Buy-to-let shocker and Apfa hits back: week in news
In focus: Arch Cru
To date the Financial Ombudsman Scheme has received approximately 250 complaints in relation to the distribution of Arch Cru funds, according to the Financial Services Authority.
In a consultation paper on a new £100m consumer redress scheme, the regulator said that of the 250 complaints, 60 have been passed to the Financial Services Compensation Scheme.
The Financial Ombudsman Service has issued determinations in relation to 40 of the remaining 190 cases, of which 35 were upheld in favour of the consumer and five were rejected. All other cases remain under consideration.
A spokeperson for law firm Regulatory Legal, which is seeking a judicial review into last year’s £54m FSA-brokered redress package, said: “The number of complaints against advisers is minimal by percentages.
“This clearly shows how investors view responsibility on this matter.”
On 22 November 2011, the Fos published a provisional decision relating to a couple that had complained about the advice they were given by their IFA in relation to an £8,000 investment into the CF Arch Cru Investment portfolio.
The ruling was found in favour of the clients and the IFA has been ordered to pay redress, with many speculating that the decision to publish the decision will prompt more to complain, or to pursue a legal case against their IFA.
In the provisional decision, Tony Boorman, an ombudsman of Fos, stated the couple will get back their original capital invested plus a return on the amount by way of capital growth of 1 per cent more than the Bank of England base rate compounded yearly from the date of investment.
Law firms warned that the decision to publish the decision on its website could ‘open floodgates’ for complaints.
At the beginning of April, the FSCS announced that it will start compensating Arch Cru investors who have claimed against advisers that are no longer trading.
However, a spokesperson for the FSCS confirmed that it hasn’t yet made any payments against Arch Cru.
She said: “We had agreed a quantification method during April and we contacted claimants. We had to wait for claimants to come back to us with their signed documents. We will start making payments soon.”
A spokesperson for the Fos said: “Overall, just because cases come through to the ombudsman, it does not mean they will be blanket upheld as we always look at the individual circumstances.”