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FOS upholds complaint over pension ‘pressure sale’

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.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Is anyone else concerned that this is actually encouraging remaining direct sales forces representatives to sell on mass in order to achieve targets and high commission sales and then leave a company as the complaints that follow go to the company rather than the representative who actually sold the policy? It seems unfair that the representative is not also held accountable. Yes targets were set and expectations high but if a ‘personal friend’ felt pressured into taking a policy then why did this individual still sell it. We all have targets in various forms but pressured selling is and will never be acceptable in any industry.

  2. This is an excellent result for the thousands of innocent people who were conned by what were laughingly called ‘independent’ financial advisors over the past few years. In a just world they would be put in clink, forced to compensate their victims in full and pay for the misery they caused.

  3. Pretty preposterous here (again).

    I just hope Sun Life Financial then pursues the sales agent for all commission paid on the policy and indeed all the costs involved now having to investigate and respond to the complaint as evidently the salesman was in the wrong from the very beginning. Potentially he is in breach of his contract of employment too by conspiring against the hand that fed him at the time – do some people have no scruples at all?

    Otherwise, to be frank, if the investor could afford the contributions, was in his mid-20s and had no pension – what was wrong with the advice, however flawed the specific contract and its costs, etc? The fact that the idiot stopped contributions after one year, if his circumstances had not changed, should not be used against Lincoln in the regime which existed at the time. I expect we’ll find the rep moved company and encouraged the premia to stop so the guy could start up a new plan with his new company to help meet those targets… that’ll be another complaint soon then!

  4. Neil F Liversidge 27th August 2014 at 6:36 am

    This smells like a conspiracy to cook up a story that nobody else is in a position to dispute and split the ill-gotten gains. How naïve is the ombudsman?

  5. Neil F Liversidge 27th August 2014 at 10:05 am

    @ Tony brown: You are factually wrong. The alleged wrongdoer was a direct salesman, not an IFA. Had he been an IFA then he would be paying the compensation personally if he was still in business. As it is SLFoC are left holding the baby as the firm responsible for the actions of their agent. Which fact the party who has ‘confessed’ is no doubt aware of, hence my suspicion that he and the complainant have cooked this up between them. Oh and one other point Tony; If somebody is ‘in clink’ they can hardly work to compensate anyone, can they? That was the flaw in the ‘logic’ behind 18th century debtors prisons. For the record, I’m completely in favour of wrongdoers being punished. That includes those who conspire to obtain a pecuniary advantage by deception. On which basis a lot of ‘claims’ firms should have their collars felt along with their ‘clients’.

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