Pensions ombudsman admits complaints handling errors

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Pensions ombudsman admits complaints handling errors

The Pensions Ombudsman has admitted errors in its handling of a vulnerable client’s case after leaving her waiting for months before informing her it had lost vital parts of her complaint.

Responding to an official complaint filed by the investor, the body said it had failed to provide the service Clare Knight had a right to expect and identified "many areas" in which it underperformed.

Ms Knight, a 64-year-old college administrator, complained to the ombudsman that London & Colonial had failed in its legal obligation to act in her best interests, known as fiduciary duty, over an offshore property scheme she had invested in via one of the investment firm's self-invested personal pensions. 

But a year after bringing her complaint she is still no closer to getting her money back and feels the ombudsman has made her look "ridiculous" in her fight with London & Colonial.

Ms Knight is not the only person feeling embittered by the ombudsman's service. 

In the last year the body received 58 complaints, mainly about delays and its processes, of which 51 were resolved.

She said: “By going to the Pensions Ombudsman I thought I could relax now and that my case was being dealt with.

“I’ve lost all confidence in their ability to make any headway in this. I’m not sure they are really equipped to make a big decision like this.”

L&C told FTAdviser it is "cooperating fully" with the Pension Ombudsman.

Ms Knight, who claimed she has already spent £20,000 on lawyers to try and get her pension back, accused regulatory bodies including the Financial Services Compensation Scheme of giving her the runaround.

She is now considering taking her case to a claims management company - and faces paying out even more with no guarantee she will get her pension back.

Ms Knight first complained to the Pension Ombudsman in March 2017. An adjudicator contacted her in April for more details, and in August he told her an update on her case was imminent. But she heard nothing until she tracked him down in September.

It was not until February 2018 Ms Knight discovered her case handler had left the ombudsman, and in March was informed no trace of her previous email correspondence could be found.

Ms Knight said: “They say they don’t have any record between them and London & Colonial, they’ve not come back to me to ask any questions about my paperwork either.

“It’s now 2018 and I transferred my pension in 2012 and realised in 2014 that there was something wrong with my investment and four years later I’m still nowhere near a decision."

The ombudsman admitted to some errors after Ms Knight made an official complaint in March but said not all communication had been lost and that the case was still ongoing.

In an apology letter a casework director at the body stated: “Having looked at your case, I realise we have not provided you with the service that you could reasonably have expected to receive.

“I have identified many areas in which we could have done better in how we handled your pension complaint. 

“We strive to provide an excellent service and I am sorry we have not been able to meet your, or our own, expectations in this case."

In another twist on 16 April this year, L&C's lawyers suggested it had received two identical claims through the Ombudsman service.

In a document seen by FTAdviser the firm wrote: "We are unsure why this same claim has arisen again now, when the claim has previously been dealt with by the POS, and almost a year after it was brought.

"Please could you confirm what happened in relation to this previous complaint and what has prompted its apparent revival, now being dealt with by you?"

Ms Knight said: "I don't feel like I'm being engaged with by the Pension Ombudsman. They are making [my claim] look ridiculous."

On the recommendation of a now defunct financial advice firm, Ms Knight invested two of her pensions, totaling £80,000, in a Cape Verde hotel development operated by The Resort Group, via a London & Colonial Sipp.

She claims her pension is now trapped in this illiquid investment and it has failed to provide promised returns.

The Resort Group told FTAdviser Ms Knight's investment is "secure" and she would be able to sell it “for a fair price at any time” as soon as she completed paying for it.

Ms Knight holds a 65 per cent share of a property in the Cape Verde resort with the balance initially due once the off-plan property had been built, which The Resort Group claimed occurred in 2016.

But due to growing concerns over the liquidity of investment, Ms Knight decided not to part with any more cash at that time.

Previously Ms Knight had also lodged a claim with the Financial Ombudsman Service in June 2015 against her adviser. But it told her the firm had gone bust and she must go to the Financial Services Compensation Scheme, which she did in July that year.

Not until August 2017 - nearly two years later - did the FSCS inform her she did not have a valid claim because she now had an ongoing claim about London & Colonial with the Pension Ombudsman.

Anthony Arter, The Pensions Ombudsman, told the publication: “We are really sorry that Mrs Knight has experienced some issues with the way in which her pension complaint has been handled recently and we take her concerns very seriously. 

“It is important to note that her pension complaint is still ongoing as it has, unfortunately, been delayed by the complexities that could arise from a number of multiple court proceedings for which we are awaiting ruling.

“We take our responsibilities towards vulnerable customers seriously and endeavour to ensure they are provided with the support they need when bringing a complaint to our service.”

carmen.reichman@ft.com