Rowanmoor claims on hold 'at least another 6 months'

The FSCS has written to claimants updating them on the progress of their long awaited claims, which are on hold while its emerging issues team probes what went on at the £1.4bn Sipp operator.

It explained the investigation was still ongoing and would take at least another six months before claims are moved on for assessment.

The FSCS said in its letter to a claims manager representing a claimant: "The firm investigation is ongoing and will take at least another six months.

"We are working with the relevant parties to get the information and documentation we need so that we can complete our investigation into the firm.

"Claims will remain on hold until the Emerging Issues team has completed its investigation. After this, your client’s claim will be moved to one of our assessment teams."

Rowanmoor collapsed last August under the weight of hundreds of complaints related to failed offshore investments in its Sipps.

These were then rerouted from the Financial Ombudsman Service to the FSCS, which has been investigating them since.

Some of those claims date back to 2019, and investors have told FTAdviser of the financial hardship they are facing due to the delays in settling their claims, with one investor who is nearing retirement saying he will have to sell his house to make ends meet.

Solicitor Claire Collinson, who represents a number of claimants, said: "Consumers who received confirmation from the Financial Ombudsman Service as long ago as January 2022 that they have legitimate claims against Rowanmoor and are due compensation are being significantly prejudiced by this ongoing and unexplained delay at the FSCS.

"One of my clients is actually at retirement age and needs his pension money now. He has had to put his home on the market as a direct result of the ongoing delay.

"Particularly where Rowanmoor themselves have put aside £71mn for consumer complaints, and agreed to follow the Fos test case against them, the FSCS’s continued delay in processing these claims is wholly unreasonable and is causing direct financial hardship to consumers the lifeboat scheme is intended to protect."

The FSCS told FTAdviser its investigation into Rowanmoor was progressing.  

A spokesperson said: "Investigations into Sipp operators like Rowanmoor are very complex due to non-standard investments accepted into the pensions they offered.

"FSCS must complete these investigations thoroughly before we can determine the eligibility of claims."

They added: "We recognise that the failure of a pension provider can cause uncertainty for customers and sometimes financial hardship. We do what we can to address these issues as soon as we can."

The FSCS said it would provide a more specific timeframe for the completion of this case "as soon as we are able to".

It has set up a dedicated Rowanmoor webpage and communicates with investors directly via emails and letters.

But Chris Bryans, of Complaints SOS, said communication was still a problem for many claimants he works with.

"The FSCS says they are communicating with the customers whose lives have been badly affected by this situation for up to 10 years now and the customers have no idea what is going on. 'I feel like I’m being gaslighted by FSCS' is what one customer said this morning."

No duplication

Questions have been raised by many investors about the ongoing investigation, after the Fos had found in their favour in a sample case in January 2022, which ultimately brought Rowanmoor to its knees.

But the FSCS assured claimants in May that it was not duplicating work already done by the ombudsman.

It said the way it determines claims and the way the Fos determines its complaints are different, particularly when it comes to the question of whether the firm owes a civil liability to its claimant, which is a core test for claims with the FSCS, but does not determine a Fos decision. 

A spokesperson told FTAdviser at the time: "The Fos determines complaints based on whether it considers that regulated firms acted in a way which was fair and reasonable in the circumstances.

"The Fos does not decide complaints based on whether a firm owes a civil liability to a complainant, which is the test that FSCS must apply under our rules.

"This means that the eligibility criteria under our rules will not necessarily be met just because the Fos may uphold a complaint in similar circumstances."

The lifeboat scheme said in today's letter it intends to update investors again in two months' time.

Last month the FSCS announced its chief executive Caroline Rainbird had left the organisation. Chief financial officer Fiona Kidy stepped into the role while it searches for a successor.

Bryans said: "If I had one message for the new chief executive at FSCS it’s this: Please put yourself in the shoes of the customers who have their lives on hold while the Rowanmoor claims have been going on for years and years.  

"For many of these vulnerable people it is devastating not knowing what is happening, when this will be resolved, or why there is seemingly another serious delay. The lady I spoke with today ended up in tears over the whole situation and not for the first time."

carmen.reichman@ft.com