SIPP 

CMCs referred to FCA over rule breaches

CMCs referred to FCA over rule breaches

Two claims management companies have been referred to the regulator over alleged rule breaches after they asked for personal information without client consent.

One of the CMCs was found to have approached Intelligent Money, a provider of investments and self-invested personal pensions, with a 'subject access' request without the clients' knowledge.

The other cold-called a British Steel worker involved in the pension debacle, and turned up on the steelworker’s doorstep within 24 hours of the call.

A ban on cold-calling, including emails and texts, was introduced in January this year, making such activity unlawful and subject to fines of up to £500,000.

Philippa Hann, managing director of litigation at law firm Clarke Wilmott, who is representing a group of former members of the British Steel Pension Scheme, said she reported both CMCs for breaches of the cold-calling ban and data privacy to the Financial Conduct Authority, however, she declined to name the companies in question.

Intelligent Money told FTAdviser that the CMC had asked for the application form that the client filled out when opening the Sipp. When the provider contacted the client it found they were unaware of the situation.

Ms Hann said: "Intelligent Money took the entirely appropriate step to contact the client themselves before releasing the data. How they got the name of the client is something I don’t know the answer to.

"This is extremely bad practice and we’ve reported it to the FCA, and we trust they’re taking action."

Julian Penniston-Hill, chief executive at Intelligent Money,  said: "Like most providers that offer Sipps we have received client information requests from CMCs. In our case they are usually misguided, as they are requesting information on the advice process, when we do not offer advice. Very few CMCs understand this.

"The CMCs are requesting high levels of client information that can be used in ways that clients have not considered. When this has been highlighted clients usually ask us not to proceed."

FTAdviser reported last week that advisers who helped steelworkers transfer out of their pension schemes are being targeted by CMCs with a view to bringing complaints to the Financial Ombudsman Service.

It emerged in April that more than 900 CMCs have registered to continue trading while they go through the FCA’s authorisation process.

Ms Hann said these practices were "deeply concerning", as they were targeting people that have already been treated "very badly, and have some vulnerabilities".

Andrew Boyt, pension transfer specialist and freelance consultant who was part of a group of advisers who provided guidance to these individuals, said that the CMCs' tactics were "appalling".

He said: "The steelworkers I've spoken to are still suffering anguish, and in some cases feel personal guilt over the transfers.

"The tactics of these CMCs are no better than those of the bad advisers who saw BSPS as a business opportunity and recommended transfers irrespective of suitability for the steelworkers.