The Financial Ombudsman Service has upheld a complaint from a consumer who claims he was pressured into taking out a pension by Sun Life Financial of Canada despite not being able to afford the contributions.
The complainant, known only as Mr Y, took out a pension in December 1998 and ceased contributions a year later due to affordability issues.
The policy was sold by Lincoln Financial, the UK division of which was acquired by Sun Life Financial in October 2009.
In a decision published by the FOS earlier this month, Mr Y says he was pressured into taking out the pension by a representative of the firm who was a personal friend and who was being put under pressure to meet sales targets.
He says he did not want and could not afford a pension at the time but the representative became aggressive when it looked as though he was not going to go through with the transaction. A second meeting was arranged and Mr Y says he was threatened to make sure he brought his cheque book to the next meeting.
The documentation completed when the pension was arranged recorded that Mr Y was in his mid-twenties, employed with an income of £16,000 a year, had no pension provision in place, and did not have a company pension scheme available to him.
Ombudsman David Ashley says his provisional decision was to reject the complaint, as it was not possible to establish what was said during the sales process.
However, the sales representative then provided a submission to support Mr Y’s version of events.
He said staff had been “heavily encouraged to make sales to friends and family as they were less likely to say no”. He also said he had been determined to meet the sales target and considering what was right for Mr Y came second to getting him to take out the plan.
In his final decision, Ashley upheld the complaint, concluding that Mr Y was pressured into taking out the policy.
The FOS has ordered Sun Life Financial to cancel the pension plan and refund all the net contributions with interest at the rate of 8 per cent per year from the date each payment was made to the settlement date.
A spokesman for Sun Life Financial says: “This product was sold by Lincoln Financial before its acquisition by Sun Life Financial of Canada.
“It is clear that the ombudsman has been provided with more information by the customer and the original representative than was provided to us at the time of the complaint. Once made aware of this information we have fully supported the ombudsman’s decision.
“Sun Life Financial of Canada remains strongly opposed to the use of pressure when selling.”