The Financial Ombudsman Service has upheld a complaint from a consumer 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 last month, Mr Y says he was pressured into taking out the pension by a representative of the firm who was a personal friend.
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.
The documentation 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 but the sales representative then provided a submission to support Mr Y’s version of events. He said staff had been “encouraged to make sales to friends and family as they were less likely to say no”.
In his final decision, Ashley upheld the complaint.
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 since it was made aware of the additional information it has supported the FOS decision.