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FOS backs claimants against embattled Sipp provider

The Financial Ombudsman Service has issued several preliminary decisions in favour of three claimants who invested more than £36,000 into the Ethical Forestry scheme through Liberty Sipp.

The investments were made after being approached by introducer Avacade, which cold called the clients and discussed moving their pensions with them.

The FOS adjudicator finds Liberty Sipp breached duty of care to clients because it ought to have known “there was a high chance that a lot, if not all, of the business introduced by Avacade, would contain a high risk of significant consumer detriment”.

Therefore it was not “fair or reasonable for Liberty to have accepted [the clients’] applications on the basis and manner proposed”.

The individuals are being represented by solicitors Anthony Philip James & Co, which says it has another 500 similar cases lodged with FOS against Liberty Sipp for clients, with a combined value of more than £18m.

APJ financial mis-selling solicitor Glyn Taylor says he is delighted the FOS has recognised Liberty Sipp had a responsibility to carry out due diligence on the business it accepted from Avacade.

Taylor argues Liberty Sipp should be liable for client losses as it agreed to accept such a large amount of questionable business from Avacade.

Liberty Sipp now has an opportunity to appeal the preliminary decisions but Taylor says he is confident the FOS will issue similar decisions on behalf of more clients.

A FOS spokeswoman notes: “Consumers don’t need to use an intermediary to bring a complaint to us. They can come to us directly, and our service is free.”

Liberty Sipp was not available for comment at the time of publication.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. And so it begins…

  2. @GA – as you said in a previous articlee post and I agree with you, in the BB case,
    ” It is worth noting what the FOS said BB should have done and the judge agreed…

    Identified SA (the investment in question) as a high-risk, speculative and non-standard investment, so it should have carried out sufficient due diligence.

    Considered whether SA was appropriate for a pension scheme.

    Ensured that the investment was genuine and not a scam, or linked to fraudulent activity.

    Independently verified that SA’s assets were real and secure, and the investment operated as claimed.

    Ensured that the investment could be independently valued, both at point of purchase and subsequently.

    Ensured Mr C’s SIPP wouldn’t become a vehicle for a high-risk and speculative investment that wasn’t a secure asset, and could be a scam.”

    With the above. none of tht is regulated advice, it is just common sense. That is the failure in duty of care (similar to the bankers duty of care, which is over 100 years old) that means these cases will be upheld by FOS and if they went to court they would be too and at more cost to the SIPP providers when they loose, unlike FOS which is a less expensive way or resolving the bl$$dy obvious.

  3. The “Appropriateness” test has been around since 2009 for non-reg products to retail customers, of course FOS will uphold these.

  4. It’s the lure of easy money it has very strong appeal………

    Do the deals, take the money and then unload the problem to someone else and live in the proceeds……. of crime

  5. Great news. I hope the firm of ‘financial advisers’ who gouged half a million from my pension pot is taking note.

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