A consumer has been waiting more than a year to receive a Financial Ombudsman Service redress payment from an advice firm due to confusion over the maximum compensation limit.
The maximum redress award the FOS can enforce is £100,000 for cases brought before 1 January 2012 and £150,000 for cases after that date.
In a decision dated June 2013, the FOS upheld a complaint against advice firm Whiting Group regarding a delay in paperwork which led to HM Revenue & Customs withdrawing tax approval of the complainant’s Scottish Life executive pension plan in May 1996. The FOS directed Whiting Group to pay a proportion of the value of the pension fund plus the value of any guaranteed benefits forfeited by the complainant.
Whiting Group has made an interim payment to complainant Michael Buttonshaw but is yet to pay the remaining redress.
Buttonshaw says he has had no further communication from Whiting Group and is concerned he will not receive the full amount. He has contacted the FCA and approached a solicitor to assist with enforcing the award.
Whiting Group director David Bridgeman says the delay has been caused by the firm’s insurer. He says: “Our insurer has agreed to pay the claim up to the FOS limit but it is questioning which limit applies as this case was submitted on the cusp of the deadline. It has advised us that the lower limit should apply.”
Bridgeman says the firm is in regular contact with the FCA on the issue and hopes to have it resolved in the coming weeks.
A FOS spokesman says the complaint was submitted to the business before 1 January 2012 but lodged with the FOS after that date. He says: “We believe the £150,000 limit should apply.” He adds the FOS expects firms to make payments in a “timely” manner with most payments made within a month.
Philip J Milton & Company director Simon Valentine-Marsh, who is now advising Buttonshaw, says: “It is imperative that FOS compensation is paid swiftly and that the client is kept fully informed.”