FCA acts against third advice firm avoiding BSPS liabilities

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FCA acts against third advice firm avoiding BSPS liabilities

The Financial Conduct Authority has acted against a third firm which it has said avoided its liabilities under the British Steel redress scheme.

The FCA said David Stock & Co Limited made unsolicited offers of £50 to 48 per cent of its clients who had been BSPS members and had not yet complained. 

The regulator said these unsolicited settlement offers were not calculated in line with its guidance and were a “deliberate attempt” to exclude former BSPS members from the redress scheme.

As a result it has imposed requirements on David Stock & Co which mean consumers who accepted these unsolicited offers must be treated in the same way as those who did not. 

The FCA said “this will ensure all eligible David Stock & Co customers receive the redress they are entitled to”.

Under the redress 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 had they stayed in the BSPS. 

David Stock & Co is the third advice firm the FCA has told to stop this practice.

In February, the regulator formally notified Abbey Lane Financial Associates Limited and Estate Capital Financial Management Limited to stop making unsolicited offers.

The FCA said Abbey Lane made offers of £100 to 82 per cent of its clients who were BSPS members and Estate Capital made offers of £300 to 83 per cent of its former BSPS members. 

Last week the FCA also published a 'Dear CEO' letter to raise concerns about firms that had calculated redress using third party actuarial providers online portals without any actuarial oversight, prior to the redress scheme commencing. 

The FCA said this appears to have been a contributing factor in cases of misleading redress offers. 

The FCA said: “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.”

The redress scheme, announced last March, has estimated that 1,400 steelworkers will receive £71.2mn in redress under the scheme.