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FCA: British Steel complainants should discuss options with FOS

Construction Building 480The FCA has urged those with complaints over the British Steel Pension Scheme to discuss how to proceed with the Financial Ombudsman Service after one of the advice firms at the centre of the scandal filed for liquidation.

Yesterday, the Financial Services Compensation Scheme said that it was preparing to declare Active Wealth in default, opening the door to compensation payouts from the lifeboat fund.

However, some clients have already lodged grievances with the FOS over unsuitable advice.

The FOS can only handle complaints relating to solvent firms, while the FSCS can only pay out compensation once it is convinced that a firm can no longer field its own liabilities and clients have a valid case.

This could leave clients in limbo with the FOS unable to continue processing their complaint once Active Wealth has been declared in default by the FSCS and before it is passed over to new handlers.

There is also a different standard of judgment used by both services: FOS rules on complaints based on what it considers fair and reasonable, whereas the FSCS operates on a civil liabilities test, paying out if it considers that a court claim would have succeeded.

A note published by the FCA on its website reads: “BSPS members who were considering raising a complaint following the joint letter from the FCA, the Pensions Regulator and the Pensions Advisory Service should contact the Financial Services Compensation Scheme to discuss how to register a claim.

“BSPS members who have already complained to the Financial Ombudsman Service should speak to their case handler to discuss next steps, including whether their complaint will be transferred to the FSCS for consideration.”

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  1. If a claim is accepted by the FSCS it is worth bearing in mind that, in accepting FSCS compensation which will be capped at £50,000, a claimant will need to assign their rights of action in respect of any other entity which might also be responsible for their losses. Anyone considering making a claim to the FSCS will want to ensure that they have considered all other avenues prior to accepting any payment.

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