The Financial Services Compensation Scheme has started accepting claims against two financial advice companies linked to a £21m pension scam.
FTAdviser reported in May 2018 that Fast Pensions, which acted as sponsoring employer for 15 retirement schemes, was closed down in the High Court, alongside five other companies associated with it.
The pensions companies and the trustee of the schemes, FP Scheme Trustees, were wound up in the public interest, after they were found to have “been used to abuse millions of pounds of people’s savings”, according to the Insolvency Service.
The Insolvency Service found between 2012 and 2013, 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes, with Fast Pensions acting as the sponsoring employer.
The FSCS has now announced it is accepting claims against 1 Stop Financial Services and Douglas Baillie Ltd, who gave advice to customers to transfer their pensions into one of the 15 schemes linked to Fast Pensions.
But the assessment of this claims hasn’t started yet, since the FSCS needs to establish whether there are protected claims against these financial advisers.
For this to happen the FSCS needs to know that the financial advisers who gave the advice owe a civil liability to customers that would enable them to be sued in court.
In July 2018, Dalriada Trustees was formally appointed by The Pensions Regulator to act as an independent trustee to 15 pension schemes linked to Fast Pensions.
The FSCS understands a number of consumers received advice from both Financial Conduct Authority authorised and unauthorised financial advisers to transfer their existing pension arrangements into one of 15 schemes linked to Fast Pensions.
It stated that some consumers received cold calls offering free pension reviews, while others were told that they could get a loan if they transferred their pension savings to one of the Fast Pensions' schemes. In some cases pension monies were invested into high risk investments, some of which have become illiquid, it added.
The FSCS has been working with Dalriada and other parties in order to obtain firm records and other documentation that will help its officials to reach a view on whether there are protected claims, it concluded.
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