Months of increases in the number of complaints about self-invested personal pension are being blamed on cold calling by claims management companies.
Liberty Sipp managing director John Fox told FTAdviser the issue is “an open secret in the industry”.
“We are aware of a number of people who have been contacted in a similar manner to the way [payment protection insurance] PPI firms carry out their cold calling,” he said.
His comments follow an announcement earlier this week that the number of complaints about Sipps received by the Financial Ombudsman Service (Fos) has continued to increase.
In the first quarter of 2016-17 the Fos received 521 new cases about Sipps, compared with 328 in the same period in 2016.
But a smaller proportion of these are being upheld, with only 50 per cent being found in favour of the consumer, compared with 66 per cent in the first quarter of last year.
Claim companies are now contacting people randomly and trying to convince them to make a complaint about their Sipp, Mr Fox said.
He associated the switch in focus for claims companies to the fact people seeking compensation over mis-sold PPI will have to make their claims before 29 August 2019, a deadline set up by the Financial Conduct Authority (FCA).
PPI is, however, still the leader of complaints at Fos, responsible for 53 per cent of all cases.
Graeme Mitchell, managing director at Galashiels-based Lowland Financial, has not heard about these companies pursuing Sipp clients.
“But I would not be surprised if this is the reason about the increase of these complaints,” he said.
Mr Mitchell, who works with Sipps for his firm's clients’ property investments, believes claim companies “are going to be looking for the next scandal or opportunity”.
“They are ambulance chasers whom are not helping people.
“They are raising the cost of advice for people, due to the number of hours that firms and advisers need to spend to investigate these complaints,” he said.
Nick Baxter, chairman of the Professional Financial Claims Association (PFCA), told FTAdviser that he is “not aware of an increase of cold calling in this area”.
He said: “Financial claim companies are moving away from the outbound marketing and relying more on the inbound for claims.”
Cold calling is on the brink of being totally eliminated from the financial claims companies, he said.
“Some outbound calls for marketing purposes are still being made, but these are not cold calling, as by the definition of the regulator,” he concluded.
The government announced yesterday (20 August) a ban on cold calling on pensions.
This will also include emails and text messages, and it will be enforced by the Information Commissioner’s Office (ICO).