Damian Fantato  

Data protection rules should hamper claim increases

Damian Fantato

Damian Fantato

It seems sometimes like the steelworkers caught up in the British Steel debacle cannot catch a break.

They have obviously found themselves faced with an incredibly complex choice about their pension, which they had very little time to take, and many of them were exploited by unscrupulous advisers.

Now it seems their data has ended up in the hands of claims management companies that are attempting to contact them for business.

There are reports that several of them have been receiving text messages encouraging them to come forward and submit a complaint to the Financial Ombudsman Service.

The issues here are twofold: firstly, while it is clearly right that investors who have lost their hard-earned savings should receive some recompense, complaints being drummed up by CMCs only helps push up the cost of doing business for scrupulous advisers through regulatory levies and therefore the cost of advice for other advisers.

The second issue is that some honest, professional advisers have helped British Steel pensioners in good faith and have done no wrong. Yet, they could now find themselves on the end of a claim.

These are long-running sores on the financial advice profession, but the interesting new issue this throws up is how the CMCs got access to the client data in the first place.

There is plenty of speculation about this, and none of it is proved, but it seems there may be grounds to test the new data protection rules that came into effect last year.

A lot of speculation surrounded the implementation of the General Data Protection Regulation, including concerns about whether advisers would have to delete their prospect lists.

But preventing client details from falling into the hands of CMCs seems a good outcome – for advisers and their clients.