A decision by the Financial Ombudsman Service to reject a pension transfer complaint based on the time barring rules could help advisers defend future claims.
The FOS has rejected a complaint against an advice firm, which wishes to remain anonymous, for advice given in 2000 to transfer from a final salary pension scheme to a personal pension.
The complaint was made in 2012 but the FOS found it was time barred as the consumer received a statement in December 2007 showing the estimated pension she would
receive was considerably less than her former scheme.
Consumers have six years from the event of the complaint to submit a claim to the FOS. If later, they have three years from when they knew or ought to have reasonably known they had cause to complain.
The complainant argued that her cause for complaint only became apparent in 2011 as she had been assured by the adviser to expect the transfer value of the policy to be low initially but to grow in later years. She also argued she had been affected by poor health, which delayed her ability to bring a complaint.
But in a decision sent to both parties earlier this month, ombudsman Gideon Moore says: “The projection the complainant received in December 2007 ought reasonably to have made her aware of her cause for complaint. She was sufficiently close to age 55 by that point [within five years] for the conclusion that she should have remained in her previous scheme to be inescapable.”
Moore added that the complainant’s illness did not constitute “exceptional circumstances”.
The decision will not be published on the FOS website as it has been rejected on time-barring grounds.
Dispusolve director Peter Turner, whose firm specialises in handling complaints for financial services firms, says: “Consumers receive a statement each year but usually only complain when they reach retirement. However, this decision shows if advisers receive a similar complaint, the first thing they should do is get hold of these projections.”
DWF partner Harriet Quiney says: “It is important to note the consumer would have had to compare two separate documents in order to make the comparison between the policies and start the clock running for the complaint.
“This decision gives advisers clues to what to look for when considering stale complaints and shows the FOS is doing exactly what it should be: making a decision based on its rules, which is fair and reasonable, and making it clear exceptional circumstances must be truly exceptional.”
Alistair Cunningham, director, Wingate Financial Planning
The time barring rules are there to stop consumers receiving advice and waiting 25 years until they retire to bring a complaint. If the advice was unsuitable it should have been demonstrable as unsuitable at any point so why did the consumer wait so long to complain?
Highclere Financial Services, partner, Alan Lakey
If a statement is clear enough for an ordinary person to understand its meaning, it is reason-able for this to start the clock running. But while this decision appears sensible, it goes against past FOS decisions on endowment complaints.