Berkeley Jacobs Financial Services has been hit by the FSA with a £175,000 fine for poor advice and misleading advertising in marketing its pensions unlocking service.
The regulator has forced the firm to set aside £1m to compensate up to 5,000 consumers who were encouraged to use their cash for short-term benefits such as holidays and buying luxury goods.
The FSA said the campaign, which aired extensively on Sky television, gave no explanation that releasing cash early meant sacrificing future pension income for short-term gain.
FSA director of investment firms David Kenmir says: “We will not tolerate firms showing such a blatant disregard for consumers' interests. No consideration was given to the substantial drop in the consumer's pension income or their inability to make up for that loss as they were so close to retirement.”