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.
